Trustees Agenda
Welcome to the BBS Trustees Agenda, our headline service for pension scheme trustees, employers and fellow professionals.
Important: The articles contained within this database summarise BBS's understanding of the topics at the time entered. They are not intended to be a statement of law and should not be relied upon as such.
Scheme rules and switching to CPI
Posted on Jul 16, 2010
From next year, CPI will replace RPI as the measure of both revaluing deferred benefits and providing statutory pension increases.
Whilst it is not yet clear how the change will be implemented, government statements suggest that deferred benefit revaluation will be split with RPI appyling before the change and CPI after. For pensions in payment, it appears that CPI will apply for increases to pensions earned both before and after the changeover.
Whilst the statutory minimum requirements will be amended this will not be overriding and a rule change may be required in some cases for schemes wishing to adopt the new measure.
Fewer people in final salary schemes
Posted on Jul 15, 2010
According to Money Mail, only 750,000 private sector workers are in a final salary scheme open to new members.
Whilst official figures by the Office for National Statistics (ONS) puts the number at 1.1 million, this includes 250,000 workers with university pensions, and 85,000 in the Railways Pension Scheme, both of which are funded in part by the taxpayer.
Regulator updates guidance on transfer incentives
Posted on Jul 13, 2010
The Pensions Regulator has updated guidance on transfer incentives which clarifies the role of the employer and trustee and aims to ensure that trustees become actively involved in managing the risks of such exercises.
The updated guidance is accompanied by a new e-learning module and is available on the Regulator's website for consultation for a period of 12 weeks.
HMRC changes position on age 50-55 transfers
Posted on Jul 12, 2010
The Government is to bring forward regulations to remove the unauthorised payments tax charge where an individual aged between 50 and 55 transfers their pension in payment to another provider. The regulations will be backdated to cover transfers made since 6 April 2010.
The regulations will apply to an individual who is aged between 50 and 55 and who has already satisfied the normal minimum pension age test of 50 and over prior to 6 April 2010, and will ensure that there will be no unauthorised payments charge on transfer sums and any payments of pension after the transfer.
Private pension indexing to be switched to CPI
Posted on Jul 09, 2010
Pensions Minister, Steve Webb, has announced plans to switch the inflation index used to increase private sector pensions from the Retail Prices Index (RPI) to the Consumer Prices index (CPI). The change will affect around five million people in final salary pension schemes, as well as payments made by the Pension Protection Fund and Financial Assistance Scheme.
Industry reaction has generally been positive. The NAPF agreed with the move to apply the changes already introduced in the public sector. Joanne Seagers, NAPF Chief Executive, commented "This gives final salary pensions some breathing space, and it will make it easier for firms to keep schemes open."
However, TUC General Secretary Brendan Barber was more critical of the effect he changes will have on pensioners' savings, commenting that "Over someone's whole retirement this will add up to a significant loss."
Public sector pensions "like an unstable Ponzi scheme"
Posted on Jul 07, 2010
According to a report by the Public Sector Pensions Commission (PSPC), the true value of the main unfunded public service pension schemes is over 40% of salary, which is double the current combined employer and employee contribution rate of 20%.
The report also claims that a lack of transparency over the real costs of public sector pensions means that the costs are forced onto future tax payers.
Peter Tomkins, Commission Chairman, commented "Like an unstable Ponzi scheme, it will only work if tomorrow's generations are able to stomach a higher cost to pay for the unfunded promises made today."
TUC criticises switch to CPI for public sector indexing
Posted on Jul 07, 2010
The Trades Union Congress has criticised the Chancellor's decision to change the indexing of public sector pensions from the Retail Price Index (RPI) to the Consumer Prices Index (CPI), claiming that it will reduce the average pension by £650 a year.
Brendan Barber, TUC General Secretary, commented that "Public sector staff have been told their pensions would be linked to RPI inflation. This has been changed without any negotiation or consultation."
Report states public sector contributions may rise
Posted on Jul 05, 2010
According to a report by the Public Sector Pensions Commission, employee contributions may have to double due to the Government greatly underestimating the cost of public sector pensions.
Peter Tompkins, Chairman of the Commission and Fellow of the Institute of Actuaries, commented "The Government is effectively running an arrangement where it pays in a lot less than it's actually costing per person and it's building up taxes for future generations to pay."
Government likely to follow NEST review recommendations
Posted on Jul 02, 2010
Steve Webb has said that the coalition Government will go ahead with NEST if the independent review panel concludes that the current structure is fit for purpose.
He also confirmed that "we'll have a Pensions Act next year, which will mainly be thinking about what we have to do on state pension age 66 and the earnings link and so on, but I suspect that would be an opportunity to do any other things we needed to do."
FSA confirms GPP commission ban
Posted on Jun 28, 2010
The Financial Services Authority (FSA) has published a policy statement entitled "Delivering the Retail Distribution Review: Corporate pensions - feedback to CP09/31 and final rules".
The statement confirms that commission on all new group personal pensions will be banned under the retail distribution review from 2013 and reveals consultancy charges will be allowed, in its final rules on corporate pensions.
