Year: 2014
Taxation of Survivors’ Benefits
5th December 2014
Under current law, if an individual has accessed his pension through drawdown, rather than by purchasing an annuity, on his death the remaining fund may be passed to a beneficiary, subject to tax: at 55% if the funds are paid as a lump sum or at the recipient’s marginal rate of income tax if the … Read more
The Charging Cap – Draft Regulations
14th November 2014
The Government has consulted on draft regulations that introduce the charge cap and other governance measures for money purchase arrangements with effect from April 2015. Governance The governance arrangements will not apply to: Small Self-administered Schemes, executive pension schemes, public service pension schemes, NEST and schemes where the only money purchase benefits relate to AVCs. … Read more
PPF Levy 2015-16
24th October 2014
Following its consultation earlier this year on the calculation of levies for the three years commencing with the 2015/16 year, the PPF has now published its response to the consultation, including further detail on the quantum of next year’s levy. The earlier consultation focussed on the design of the levy framework – which affects the … Read more
New accounting standard – FRS 102
19th September 2014
Introduction FRS 102 becomes applicable for accounting periods starting on or after 1 January 2015. It (together with FRSs 100, 101 and 103) replaces all other existing FRSs and so will be the standard that covers how entities account for the cost of their pension arrangements. In line with international accounting standards, the STRGL is … Read more
Draft Taxation of Pensions Bill
29th August 2014
The Government has published the Draft Taxation of Pensions Bill, which will implement the flexibilities announced in the 2014 Budget and introduce anti-avoidance measures. If an individual does not wish to buy an annuity with his money purchase pension savings he will have two new options available: flexi-access drawdown and uncrystallised funds pension lump sums. … Read more
Government review of survivor benefits
1st August 2014
The Marriage (Same Sex Couples) Act 2013 required that the Government undertake a review of survivor benefits in occupational pension schemes, considering the differences in survivor benefits between widows and widowers and between opposite-sex survivors and same-sex survivors, as well as the costs of eliminating such differences. Background Differences arise as a result of legislative … Read more
Budget response 2014
25th July 2014
Following the Budget announcements that no members of defined contribution (DC) pension schemes would have to buy an annuity in future – and that, indeed, they could take the whole of their savings in one cash sum at retirement – the Government issued a consultation about the new flexibility. The consultation closed in June and … Read more
Pension Schemes Bill 2014
11th July 2014
The Government has published the Pension Schemes Bill, which will permit the introduction of Collective Defined Contribution schemes. Defining Ambition The Bill starts by defining three types of scheme: defined benefit (“DB”) defined contribution (“DC”) and shared risk or defined ambition (“DA”). A DB scheme is defined as one which provides a certain level of … Read more
Pensions Act 2014
27th June 2014
The Pensions Act, dealing mainly with the introduction of the single-tier State Pension and the increase in State Pension Age to 67, was enacted on 14 May. We have updated our earlier commentary on the Bill, to reflect subsequent amendments. State Pension The Act makes provision for the new single-tier State Pension that will be … Read more
New Rules for Scheme Funding
13th June 2014
Following a consultation in the Winter, the Regulator has now published its final documents setting out how it will regulate scheme funding in the future, taking account of its new statutory objective “to minimise any adverse impact on the sustainable growth of an employer” and reflecting what they have learned since 2005. There is a … Read more
PPF Levy Consultation
6th June 2014
On 29 May the PPF published its consultation on the calculation of levies for the three years commencing with the 2015/16 year. This consultation focusses on the design of the levy framework – which affects the distribution of the levy between schemes. There will be a further consultation in the Autumn, covering the PPF’s estimate … Read more
Better workplace pensions
25th April 2014
The Government has issued a consultation: “Better workplace pensions: further measures for savers” regarding its proposals for the further regulation of defined contribution (DC) occupational pension schemes. The most-widely reported proposal is a cap on the annual charge paid by members, of 0.75% of funds with effect from April 2015. This cap will apply to … Read more
Budget 2014 – what price freedom?
31st March 2014
In his 2014 Budget the Chancellor, George Osborne, surprised us all with his announcement regarding much greater flexibility being offered to members of defined contribution (DC) pension schemes when they retire. The proposals are due to take effect from April 2015, although they remain subject to consultation at present, the consultation closing in June. The … Read more
Where does the (PPF) buck stop?
28th February 2014
A company appealed against its Pension Protection Fund (PPF) levy on the grounds that the D&B failure score for a subsidiary company in Luxembourg was not accurate. The PPF Ombudsman agreed that the failure score was not accurate and ordered the PPF to recalculate the levy. The PPF appealed – and the High Court has … Read more
Cheaper pensions? not yet!
24th January 2014
We reported in November (here) on the Government’s proposals to implement a cap on charges levied on members in workplace pension schemes with effect from April 2014. While it is important that members of such schemes receive value for money, in the comment at the end of our article we did raise some concerns that … Read more
PPF confirms 2014-15 levy
17th January 2014
We reported last October (here) on the Pension Protection Fund’s (PPF’s) proposals for the 2014-15 levy. The PPF has now published the final Levy Determination, confirming that: the levy scaling factor will remain unchanged from 2013-14 at 0.73; the scheme based levy multiplier will also remain at last year’s level, being 0.000056 and the estimate … Read more
Delay in new PPF failure scores
10th January 2014
The Pension Protection Fund (PPF) has announced a delay in making Experian failure scores available to levy payers. Experian is replacing Dun & Bradstreet as the PPF’s appointed insolvency risk provider. While the insolvency scores provided by Experian will not be used in the calculation of the levy until the 2015/16 levy year, the PPF … Read more