Year: 2016
Automatic enrolment thresholds 2017
16th December 2016
The Government has confirmed the following figures, relating to automatic enrolment obligations, for the 2017/18 tax year: £10,000 for the automatic enrolment earnings trigger, unchanged from 2016/17, £5,876 for the lower limit of the qualifying earnings band, equal to the National Insurance Lower Earnings Limit, and £45,000 for the upper limit of the qualifying earnings … Read more
Consultation on equalising for the effect of GMPs
2nd December 2016
The Government is consulting on: the changes contained in the draft Occupational Pension Schemes and Social Security (Schemes that were Contracted-out and Graduated Retirement Benefit) (Miscellaneous Amendments) Regulations 2017, secondary legislation which has been introduced in the past where the DWP committed to review the provisions and a new methodology for equalising pensions for the … Read more
Interim Report of the Defined Benefit Taskforce
4th November 2016
Summary The Defined Benefit (DB) Taskforce has released its interim report. Its key findings are: DB schemes matter to the economy – £1.5 trillion invested through DB schemes supports the UK economy through investment in businesses and infrastructure and by providing income for pensioners that turns into consumer spending; schemes’ funding deficits have been growing … Read more
Secondary Annuity Non-market
28th October 2016
The Government has announced that plans for creating a secondary annuity market with effect from April 2017, have been scrapped. Such a market would have allowed individuals who have bought annuities under Defined Contribution schemes to sell those annuities, either back to the insurance company that issued them or to a third party. However, the … Read more
Independent review of State Pension Age – Interim Report
21st October 2016
Summary John Cridland has published his interim report on the review of State Pension Age (SPA). The scope of the review is limited to those reaching SPA after April 2028. Amongst other issues, the review considers the question of whether a universal SPA remains appropriate, or whether some groups should be permitted to draw their … Read more
PPF levy 2017/18
30th September 2016
The PPF has announced that it expects the 2017/18 levy to total £615 million. This is the same as the original estimate for 2016/17, although the PPF expects individual schemes to see changes to the amount of their levy invoice. Most schemes are likely to see an increase unless mitigation is put in place – … Read more
VAT on Pension Fund Management Costs
9th September 2016
On 5 September HMRC announced a further extension to the period during which companies with defined benefit pension schemes may continue to operate the existing regime for recovery of VAT on scheme costs (under which the company may reclaim 30% of the VAT charged on investment management fees). HMRC had previously extended the period to … Read more
Extension of Monetary Easing
19th August 2016
On 3 August the Monetary Policy Committee of the Bank of England voted unanimously to reduce base rate to 0.25% per annum and, by a majority, to extend the Bank’s asset purchases (“Quantitative Easing”) by £70 billion to £445 billion. The markets’ response was a further weakening of Sterling and falls in Gilt yields – … Read more
Brexit – issues for pension schemes
8th July 2016
Summary On 23 June the UK people voted to leave the European Union and this has had a significant impact on markets, particularly: Gilt yields and the expected path of future interest rates, expected inflation, the value of Sterling and expected economic growth. Potential implications Gilt yields have fallen materially since the vote, leading to … Read more
The Regulator’s annual funding summary 2016
27th May 2016
The Pensions Regulator issued its annual funding statement for defined benefit schemes on 13 May 2016. This sets out the Regulator’s views on acceptable approaches to the valuation process for schemes with valuation dates between 22 September 2015 and 21 September 2016. The statement was accompanied by analysis of how these schemes might be affected. … Read more
Budget 2016
18th March 2016
Despite what we had been led to believe by last summer’s consultation and by the announcement in the Autumn Statement, the Chancellor resisted the temptation to make further changes to the pensions taxation regime in the Budget. LISAs He did, however, introduce a new savings vehicle – the Lifetime ISA, or “LISA” – for the … Read more
Creating a secondary annuity market
5th February 2016
The Department for Work and Pensions (DWP) has responded to the consultation issued early last year. It plans to implement a secondary market for annuity holders to sell their annuity to a third party, with effect from 6 April 2017. The DWP acknowledges in the paper that retaining their annuity will be the most suitable … Read more
Pensions Regulator Guidance on Integrated Risk Management
8th January 2016
The Pensions Regulator’s Code of Practice 3, on funding defined benefit pension schemes, stresses the importance of having an integrated approach to setting investment and funding strategies, taking account of the strength of the sponsoring employer’s covenant. TPR has now issued practical guidance on what such an integrated approach should look like. The guidance is … Read more