The DWP will create an automatic transfer system for small defined contribution pots of less than £10,000. The pot will automatically transfer to the new employer’s scheme unless the member opts out. Details of the proposals are included within the recently published paper entitled ‘Automatic transfers: consolidating pension savings’ http://tinyurl.com/blh3shu . The DWP aims to provide for a system for automatic transfers within the forthcoming Pensions Bill. Any emerging legislation will be subject to prior consultation.
The Head of Premier’s specialist Charity Group, John Reeve was quoted in this month’s Pension Age in an article looking at the problems faced by the Charitable sector running pension plans
Following Steve Webb’s recent announcement that the date for GMP equalisation had been shelved until Spring 2014, the government has now published an interim response to its consultation on how to equalise GMPs.
It would appear that the countries opposed to the proposals have nearly enough votes between them to block the change and it is therefore conceivable that, even though the European Commission may wish to push its proposals through, they will be blocked.
In today’s budget Chancellor George Osbourne made a number of announcements with regard to pensions. The key points are as follows:
• No further changes to the tax regime for pension savings
• Plans to smooth assets and liabilities are not to be implemented
• The Pensions Regulator will have a new objective “to have regard for the growth prospects of employers”.
• The implementation of the new single-tier state pension will be brought forward to 2016
Let Premier's experts guide you through the practical steps you need to take in the run-up to your staging date.
Attached is our summary of the market movements in February 2013
Trustees should consider putting in claims for VAT on investment fees to avoid mising out.
The regulator set a deadline of 31 December 2012 for schemes to comply with its ‘common data’ record-keeping requirements. Now that this date has passed it has announced that it will be selecting over 200 schemes and requesting information about their record-keeping. If any breaches of legislation are found it may take enforcement action.
The review will start in March.
The government confirmed on 11 February that next month it will consult on proposals to simplify the auto-enrolment process. Areas for examination include:
• Making assessment of the workforce easier
• Making it easier for DC schemes to show that they meet the scheme quality requirements
• Removing the duty to enrol particular groups such as those who benefit from protection because they have already exceeded the lifetime allowance for tax purposes
Speaking at a recent Association of Pension Lawyers event, Steve Webb the pensions minister announced that the DWP is looking at simpler ways of equalisation GMPs following widespread criticism of the government’s initial proposals last year.
Whilst it was initially anticipated that a different methodology would be announced this year, it now appears that it won’t be until Spring 2014.
Speaking at a recent industry conference Steve Webb has revealed that , based on the experience of larger schemes that have already “staged”, the auto-enrolment process will be simplified in time for small to medium companies staging in 2014.
Following the introduction of a voluntary code on incentive exercises last year, the recent draft Pensions Bill includes clauses that allow the government to prohibit the use of cash incentives as an inducement to members to transfer out of a DB scheme.
The powers will not be needed if the pensions industry complies with the voluntary code and will cease to exist in seven years if this proves to be the case.
This will almost certainly mean that Companies will not offer cash. Indeed we are seeing most exercises now undertaken with the highest possible consideration of the member and making sure that they make appropriate decisions.
The DWP has opened a consultation calling for evidence on :
• Whether the smoothing of assets and liabilities would be appropriate in the calculation of assets and liabilities
• How smoothing might be applied
• Whether a new statutory objective is necessary for the Pensions Regulator which is to consider the long-term affordability of deficit recovery plans to sponsoring employers and to include this within the Code of Practice on scheme funding
Responses on the new objective are required by 21 February 2013 and by 7 March 2013 on the smoothing of assets.
Attached is our summary of the market movements in December 2012