HMRC has now issued further guidance on the implications of the CJEU rulings in ATP and PPG, two cases that dealt with the VAT treatment of costs incurred by pension funds. Clarification of HMRC’s approach has been eagerly awaited, following consultation with a range of industry bodies. So where do things stand now? Defined contribution … Continue Reading
What are the key questions you ask yourself when deliberating which pension fund basket to put some (or all) of your eggs in? Of course, for many people there is no choice – their occupational pension scheme is the only place to go. Others may look for pensions providers that have a good track record … Continue Reading
It looks like both Motorola and Bristol-Myers Squibb (BMS) will be transferring significant portions of their defined benefit pension plans liability to Prudential Insurance. Both buyouts were announced this week – and are expected to be completed in December. The Motorola plan buyout will be the third largest in the United States (following the 2012 … Continue Reading
The “Better Together” campaigners will be breathing a sigh of relief this morning as the referendum on Scottish independence has returned a “No” vote. The impact of a “Yes” victory on pensions would have been profound and far-reaching. Concerns were raised during the independence campaign around the lack of clarity on pensions issues. These included … Continue Reading
But pension scheme demergers are going to happen What to do about pension schemes which operate across Scotland and the rest of the United Kingdom? That is just one of the questions which will need to be resolved in the event of a “Yes” vote in the Scottish independence referendum on Thursday. It will be … Continue Reading
“Hurrah!” I thought, when I saw that the Government review had been published on the differences in survivor benefits provided by occupational pension schemes for opposite and same sex spouses and civil partners. “At last!” I thought, some clarity on the legal v moral argument around this area of discrimination that still remains in the … Continue Reading
Transparency and trust: two of the reasons why many pension plans have appointed professional independent trustees, or are considering doing so. But a Government paper focussing on transparency and trust may cause many plans to have to re-engineer how their trustee board operates. The problem lies in the Government’s report entitled “Transparency & Trust: Enhancing … Continue Reading
When Section 36 of the Pensions Act 2014 comes into force, employees who subsequently join a UK defined contribution pension scheme or arrangement will be entitled to receive scheme benefits after 30 days’ service. Currently, many schemes refund members’ contributions if they leave the scheme before completing 2 years’ service, rather than provide benefits, as … Continue Reading
When the UK Budget was announced in March, the excitement in the pensions world was centred on the ability to take an entire DC fund as cash and, should you so wish, buy a Lamborghini (or a few pairs of Jimmy Choos). Alongside this was the promise of free, impartial financial guidance (presumably as to … Continue Reading
We have become used to the idea that the UK Government is going to rewrite history with some time travelling pensions legislation. It told us it would be doing that back in July 2011 when it announced its intention to amend the statutory definition of money purchase benefits retrospectively. Section 29 of the Pensions Act … Continue Reading
Back in February, HMRC issued Brief 06/14 outlining their response to the European Court decision in the PPG case. This promised a change in the long accepted practice of allowing employers to recover a proportion of VAT incurred on the administration of defined benefit pension schemes – the so-called 70/30 rule. HMRC planned to scrap … Continue Reading
Physics was not my strong point at school and, as for quantum mechanics, well … So imagine my surprise when vague recollections of Schrödinger’s famous thought experiment, about a cat in a box which is both dead and alive at the same time, gave me an excellent (well good enough for me) analogy for one … Continue Reading
As expected, the Queen’s Speech today confirmed that plans will be introduced to allow for collective pension arrangements. In recent years, employers have moved away from providing defined benefit pension arrangements, owing to the funding risks imposed upon them, and have tended to introduce defined contribution pension arrangements, in which each employee has his or … Continue Reading
One of the most fertile areas where trustees of UK pension schemes administered by third party providers could be at risk of suffering damage to their reputation is when errors occur. The cost impact of such errors could also be significant for the trustees and the scheme’s sponsoring employer (not to mention the provider!). Trustees … Continue Reading
From Government Departments, to regulatory bodies, to industry groups… everybody has been tinkling on the ivories, and creating a cacophony of sound on the subject of Defined Contribution governance in workplace pension plans. This has been lacking in theme and melody, until last month when the DWP stepped forward to air its latest composition – … Continue Reading
Judging from the Pensions Minister’s statement we can be optimistic that the Government has listened to the concerns of the pensions industry about the complexity of the approach originally proposed by the Department for Work and Pensions on the new definition of “money purchase benefit”. The Minister confirms that “schemes will not need to revisit … Continue Reading
The first same sex marriage ceremony in the UK will take place shortly after midnight on Friday 29 March 2014. Whilst the subject of pensions is unlikely to be the first thing on the happy couple’s minds it is something which those who run occupational pensions schemes need to think about and act on. The … Continue Reading
Following the European Court’s judgment in ATP it would be reasonable to think that we had reached the end of the road on the VAT treatment of management services provided to pension funds. To date there has been a mixed bag of results with the Court holding in Wheels that the supply of management services … Continue Reading
Like buses, VAT cases involving pension funds seem to come in threes. The latest arrival is the European Court decision in the Danish ATP case which completes a set with Wheels and PPG. The Court has ruled that defined contribution schemes can qualify for exemption of management fees. This is on the basis that a DC fund … Continue Reading
Written by Catherine McKenna Major reforms have been proposed in the Budget to the tax regime for defined contribution pensions to introduce much greater flexibility on how accumulated savings can be used. No changes were announced to the annual and lifetime limits (which reduce in April). From 27 March 2014 the amount of guaranteed pensions … Continue Reading
On 6 April 2014 the lifetime allowance for pensions will drop yet again, this time to £1.25m. Savers who have an aggregate pension fund that is approaching the £1.25million mark need to act now to preserve the previous lifetime allowance of £1.5million or risk wholly avoidable punitive tax charges. By opting for fixed protection 2014 … Continue Reading
Having considered the various consultation documents issued by the Pensions Regulator, it wouldn’t surprise us if many trustees feel that they are already following the approach set out in the DB funding consultation, ie, focusing on covenant, funding and investment when going through an actuarial valuation. So where will the real focus be for any … Continue Reading
Changes to the state pension age have featured in many news headlines today. The Government’s guiding principle is that people should expect to spend up to a third of their adult life in retirement. Increased life expectancy represents good news but it is not such good news (for most people!) that their working lives will … Continue Reading
