Year: 2012


Automatic Enrolment Thresholds 2013/14

19th December 2012

The Government has confirmed the following figures, relating to the new automatic enrolment obligations, for the 2013/14 tax year: £9,440 for the automatic enrolment earnings trigger, equal to the PAYE threshold, £5,668 for the lower limit of the qualifying earnings band, equal to the NICs Lower Earnings Limit, and £41,450 for the upper limit of … Read more

2012 Autumn Statement

7th December 2012

George Osborne delivered his Autumn Statement on 5 December and made further changes to the pensions tax régime – with effect from 6 April 2014: the Lifetime Allowance (LTA) (the amount of tax-advantaged savings that one may accumulate in total in pension arrangements) will be reduced from £1.5 million to £1.25 million – lower than … Read more

Amending Bridging Pensions

13th November 2012

The Government is consulting on regulations that will allow schemes which provide bridging pensions to continue payment of those pensions until State Pension Age (SPA), even where this is beyond age 65. Background Some defined benefit schemes, if they have a pension age which is earlier than SPA, provide a temporary “bridging” pension between actual … Read more

PPF Funding Determinations

12th October 2012

Introduction The PPF is aiming to simplify the process of assuming responsibility for schemes in assessment.  Until now, it has been necessary for an actuary to undertake a detailed valuation of a scheme’s assets and liabilities under section 143 of the Pensions Act 2004 (“a section 143 valuation”) in order to establish that a scheme … Read more

The Foreign Account Tax Compliance Act (FATCA)

21st September 2012

FATCA is a law introduced in the USA to root out overseas tax avoidance.  Starting in January 2014 (although it has been deferred twice so far!), Foreign Financial Institutions will be required to: register with the US Internal Revenue Service (IRS), provide information to the IRS regarding any US taxpayers who are “account holders” and … Read more

As simple as ABC – Asset-Backed Contributions

3rd August 2012

This article replaces our earlier article on the same subject and reflects subsequent amendments. The Government has introduced legislation, into the Finance Act 2012, to ensure that employers who use Asset-backed Contributions (“ABCs”) to fund deficits in their pension schemes do not benefit from excessive tax relief on those contributions. The measure that they originally … Read more

Small Pots Consultation – the Government’s Response

25th July 2012

Background The Government ran a consultation last year aimed at addressing the problem of “small pots” – small pension accounts that relate to former scheme members. This issue is expected to become more widespread as the auto-enrolment of millions of new pension savers begins later this year and as people tend to move job more … Read more

New Code for Incentive Exercises

14th June 2012

A working party of individuals from across the pensions industry, including representatives of the Department for Work and Pensions, has published a code to govern the way that pension incentive exercises are run.  Such exercises may constitute the offer of enhanced transfer values, generally to deferred members, or the offer of a pension increase exchange, … Read more

Changes to the Retail Prices Index (RPI)

8th June 2012

Summary The Consumer Prices Advisory Committee (CPAC) has recommended a change in the method of calculation of the RPI, to eliminate “unjustified causes” in the difference between Retail Price inflation and Consumer Price inflation (CPI).  Any such change is likely to result in a reduction in scheme liabilities that are linked to the RPI, although … Read more

The effect of TUPE on early retirement benefits

1st June 2012

Summary The case, in the High Court, of Procter & Gamble (P&G) v Svenska Cellulosa Aktiebolaget SCA (SCA) tested the extent to which early retirement benefits may be considered “old-age benefits” and, as such, exempt from the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The Court determined that an early retirement benefit can indeed be … Read more

The Pensions Regulator’s Survey on Record-keeping

Summary The Pensions Regulator has issued a report detailing the key findings from its third record-keeping survey, conducted among a representative sample of trust and contract-based pension schemes. The main findings were: awareness of the regulator’s guidance has remained very high – in 94% of schemes the administrator was aware of the Regulator’s record-keeping guidance – … Read more

Le taxe? Ooh la la!

22nd May 2012

Summary UK pension schemes may be able to reclaim tax paid to the French tax authorities following a recent decision by the European Court of Justice (ECJ). Background The French authorities levy a withholding tax, of between 15% and 25%, on dividends paid to approved investment funds that are not resident in France, whereas no … Read more

The Queen’s Speech 2012

11th May 2012

State pension reform The Queen’s Speech outlined plans for legislation that will introduce a flat-rate state pension for new pensioners. The current state pension is £107.45 a week for those with a complete National Insurance record and can be increased to £137.35 with pension credit. The flat rate of £140 a week (rising to £155 … Read more

Pensions in Bankruptcy

9th May 2012

Summary On 4 April 2012, the High Court ruled, in the case of Raithatha v Williamson that the pension of Mr Williamson, who was bankrupt, could be used to repay his creditors. Until now, it has been accepted that pension benefits are protected from creditors. However, as Mr Williamson had reached pensionable age under the scheme in … Read more

Automatic Enrolment Thresholds

28th March 2012

The Government has confirmed the following figures, relating to the new automatic enrolment obligations, for the 2012/13 tax year: £8,105 for the automatic enrolment earnings trigger, equal to the PAYE threshold, £5,564 for the lower limit of the qualifying earnings band, equal to the NICs LEL, and £42,475 for the upper limit of the qualifying … Read more

Update on Gender-based Annuities

31st January 2012

Following the Test-Achats  ruling in the European Court of Justice last year, which decided that premiums for, and benefits payable under, insurance contracts must be calculated on a gender-neutral basis from 21 December 2012, the European Commission has now published further guidance.  This confirms that the requirement for annuities to be priced on a gender-neutral basis does … Read more

The Pensions Act 2011

10th January 2012

The Pensions Act 2011 received Royal Assent on 3 November.  The main changes made by the Act, in relation to occupational schemes and their employers, are to: accelerate the existing timetable for increasing the State Pension Age to 66, reflect changes to the auto-enrolment requirements agreed following a review  in 2010 and reflect the introduction … Read more