Pension Schemes Bill has its Second Reading
Shortly after MPs returned from the summer recess the Pension Schemes Bill had its Second Reading in the House of Commons.
Unsurprisingly, much of the debate was centred around the contents of the Bill (see Pensions Bulletin 2014/26). In addition, in relation to exit fees, the pensions minister Steve Webb said that, after receiving a report due in December on charges in legacy DC schemes, the Government will, once the evidence becomes clearer, be able to decide whether additional measures are required to protect savers who post-April 2015 wish to take their money as a lump sum instead of buying an annuity.
He also said that the complexities of drawing up the Bill made him more sympathetic to a sole Pensions Regulator, but that the Bill would not be the vehicle to achieve this.
The Department for Work and Pensions has marked this step in the progress of the Bill though a press release that amongst other things recounts the pensions “reforms and successes” of the Coalition Government.
Second Reading has also been accompanied by a call for evidence from the Public Bill Committee, the deadline for which is 14 October.
“Fit and proper” guidance for scheme administrators published
HM Revenue & Customs (HMRC) has published guidance which explains its approach to determining whether or not a scheme administrator is a “fit and proper person” under new powers introduced from 1 September 2014 intended to combat pension liberation activity.
The key section is that which deals with the factors that may lead HMRC to decide that the scheme administrator is not a fit and proper person – the legislation not giving a definition of the term.
HMRC will ordinarily assume that all persons appointed as scheme administrators are fit and proper unless it holds or obtains information which calls that assumption into question. Under its new powers, where HMRC believes that a scheme administrator is not a fit and proper person, it can refuse to register a new pension scheme or de-register an existing registered pension scheme.
Pensions Advisory Service in business for 30 years
The Pensions Advisory Service (TPAS) has published its latest annual review of its operations, which also looks back at the 30 years that have passed since it was set up as the Occupational Pensions Advisory Service. In this regard TPAS notes that while some things have or haven’t changed, the biggest factor driving queries received has been legislative change, and it anticipates that this will be a significant challenge going forward as people digest the impact of the Government’s dramatic reform of the pension environment.
Reporting on the year that has just passed:
- TPAS has carried out the latest in a series of surveys of women’s experience of pensions which found that in general women still find it more difficult to build a decent pension – TPAS remains committed to raising awareness and support for women to tackle this
- The Budget announcement of a revolution in the way people will be able to access their pension savings generated considerable interest with the number of calls and questions increasing significantly in the immediate aftermath
- Pension liberation queries have become a “worrying” feature of TPAS with almost 1,000 queries received. This return of pension fraud on a scale not really experienced since the late 1980s, and of an even more sophisticated nature, is a particularly disappointing development and raises the speculation of just how significant the problem is based on just TPAS’ limited exposure
On other matters:
- The most common written queries received concerned state pensions, retirement planning and decisions, legal rights and entitlement
- The web chat service, launched in August 2013, has generated over 5,500 web sessions, with retirement planning the most common theme
- The top queries received by telephone concerned retirement planning and decisions, tracing pensions, auto-enrolment and trivial lump sums
- Complaints needing further investigation rose 12% on 2013, with issues of entitlement and mistakes accounting for over half of the 2,221 complaints followed up
- Almost half (46%) of complaints concerned DC schemes, with a 46% increase in complaints against self-invested personal pension plans (SIPPs)
- Ill-health early retirement decisions, in particular, but decisions in general were the top reasons for complaints against public sector schemes
- Entitlement is the top reason for complaints against private sector defined benefit schemes, with mistakes and overpayments also featuring prominently
Finally, TPAS expects to relaunch its website later this month.
Autumn Statement date announced
The Chancellor of the Exchequer has announced that this year’s Autumn Statement will be delivered on Wednesday 3 December 2014.
This Pensions Bulletin does not constitute advice, nor should it be taken as an authoritative statement of the law. For further help, please contact David Everett at our London office or the partner who normally advises you.
