Archives: UK Pensions

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When should pension trustees flex their shareholder muscles?

In January 2017 the Pensions and Lifetime Savings Association (PLSA), as a representative body for pension funds, published its amended Corporate Governance Policy and Voting Guidelines. The PLSA observes that many of its members hold equity stakes in UK companies as part of their investment portfolio and have a clear interest in promoting the success … Continue Reading

It’s the year of the rooster – what are we cock-a-doodle-doing in pensions?

After a busy 2016 in the pensions world it looks likely that 2017 will be just as eventful. The UK government will be following up on various consultations and finalising numerous pieces of legislation that are currently in draft. The planned green paper on DB pension reform should also make for some interesting reading, especially … Continue Reading

EU Directive on Institutions for Occupational Retirement Provision (IORP II)

On 8 December 2016 the European Council published that it had adopted IORP II, which was approved and agreed by the European Parliament on 24 November 2016. The European Council set out in its publication that the directive is aimed at facilitating the development of institutions for occupational retirement provision (IORPs) and better protecting pension … Continue Reading

Populism, profit-shifting and UK pensions

The demand for corporates and wealthy individuals to adopt greater tax transparency continues to build momentum – the significance of the global reaction to it makes the recent Autumn Statement seem like chicken feed. The reforms being formulated could have a dramatic impact upon tax strategies and corporate governance generally. Whilst it will no doubt … Continue Reading

What a relief – no more changes to pensions tax relief (and no more Autumn Statements)!

Save for confirmation of a ban on cold calling and a reduction in the Money Purchase Annual Allowance, the UK Autumn Statement included no pension reform to the great relief of an industry in desperate need of a period of stability. The pension system was the cookie jar into which George Osborne kept dipping. Barely … Continue Reading

Confusion reigns on CPI?

CPIH is to become the preferred method of UK consumer price inflation from March 2017, according to a statement issued by the National Statistician on 10 November 2016. This follows a wide-ranging and long-lasting process of consultation and consideration. But what will be the impact on UK pensions? Pension inflation measures have been in the … Continue Reading

Further changes to triviality rules affecting DC and hybrid plans – not such a trivial issue?

New legislation has corrected an anomaly that has arisen in relation to trivial commutation rights for members of certain UK Defined Contribution (DC) and hybrid pension plans. Following changes made on 6 April 2015 to the statutory definition of “trivial commutation lump sum” (TCLS), a TCLS can now only be paid from a Defined Benefit … Continue Reading

Corporate professional trustees breathe collective sigh of relief

The UK Companies Act 2006 currently allows companies to appoint a corporate director as long as at least one of the directors is an individual. As most professional trusteeship providers operate as companies, the law effectively allows them to be appointed as a corporate director of the corporate trustee of a pension plan. However, the Small Business, … Continue Reading

Caps off to PPF consultation!

The Department for Work and Pensions (DWP) has launched a consultation on proposed changes to the Pension Protection Fund (PPF) compensation cap, which would increase the potential compensation for long-service pension plan members. At present, members who have not yet reached their pension plan’s normal pension age when their plan enters the PPF are paid … Continue Reading

There is no such thing as easy cash

Following a change in UK legislation there is now uncertainty about if, and how, Guaranteed Minimum Pensions (GMPs) can be commuted for cash before GMP age (65 for males and 60 for females). Some pension plan advisers are suspending trivial commutations pending trustee instructions and we are increasingly being contacted by clients for advice on … Continue Reading

UK pensions VAT – yet another update

Keen readers will recall the long-running saga of the correct treatment of VAT incurred by employers on pension fund costs. Following rulings by the ECJ, HMRC had determined that it needed to change existing UK practice. In particular, this affected defined benefit schemes where HMRC had allowed employers to recover some, but not all, of … Continue Reading

Financial services and not-for-profit firms should consider new PPF proposals on insolvency risk scorecards

The UK Pension Protection Fund (PPF) is reviewing its insolvency risk model with Experian. The proposals being considered are particularly relevant to the financial services and charity sectors. They would be introduced from 2018/2019 (and will not be part of the draft levy rules and levy estimate for 2017/18, which we expect will contain few … Continue Reading

Second bite: Court decides a pension deficit for service company employees must be paid by the trading company

Many group companies operate a service company to employ staff and second them to other group companies. These arrangements are often not fully documented, particularly in groups who see themselves as one business. However, this can cause issues on an insolvency, as shown recently in the case of MF Global UK Ltd (In Special Administration), … Continue Reading

FASt action required by qualifying pension plans

Earlier this year it was announced that the UK’s Financial Assistance Scheme (“FAS”) would close to applications from 1 September 2016. This does not affect pension plans that are currently progressing through the notification and qualification process or pension plans that have already qualified for assistance. However, any qualifying pension plans that have not yet … Continue Reading

21st century trusteeship – bringing UK pension plan governance up to date

On 22 July 2016, the Pensions Regulator published its 21st Century Trusteeship and Governance discussion paper.   The Regulator is acutely aware that boards of occupational pension plans carry out a very important and difficult role. Trusteeship is voluntary and, in aggregate, trustees are responsible for managing £1.8 trillion of assets on behalf of 32 million … Continue Reading
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