The future of pensions

United Kingdom

The Pension Bill, published today, represents the Government's attempt to provide a framework to restore confidence in pensions saving. Along with the Inland Revenue's ongoing simplification of tax rules, it will introduce major changes to the rights and obligations of employers, trustees and members.

CMS Cameron McKenna will be providing a Plain English Guide to help you understand the raft of changes – please click here for details.

The key points in the Bill include:

  • The demise of OPRA and its replacement by "The Pensions Regulator".
  • New powers for the Regulator, including the ability to freeze benefits and a power to direct third parties (such as administrations and insurance companies) to take steps to assist trustees
  • The Pensions Regulator will have responsibility for publishing non-binding Codes of Practice.
  • Trustees will have to complete annual returns.
  • Whistleblowing obligations will be extended to advisers (other than lawyers).
  • The establishment of the Pension Protection Fund to act as a safety net where sponsoring employers are unable to meet pensions promises
  • The introduction of levies on employers sponsoring pension schemes to fund the Pension Protection Fund
  • Details of the scheme specific funding standard that will replace the Minimum Funding Requirement
  • Simplified member-nominated trustee requirements
  • An increase in the level of knowledge and understanding expected of trustees
  • Inclusion of pension rights in the Transfer of Undertakings protection (TUPE)
  • Reducing the maximum level of annual increases required by legislation from 5% to 2.5% for benefits earned after April 2005
  • Changes in the calculation of statutory debts arising against employers where a pension scheme winds up in deficit
  • Changes to State pensions, including allowing individuals to defer their basic State pension in return for a lump sum at a later date

For further information please contact Mark Atkinson at [email protected]