Pension radar service special - including the Finance Bill 2005!
Well, last week was another frantic one in the Mother of all Parliaments, particularly on the pension front. Iíve got enough stuff littered over my desk at the moment to produce about six BeeLines, but Iíve decided to lump them all together in this one mega-BeeLine and do for them all in one go. I mean, what a way to spend the week after Easter! Just think of it as a sort of busy BeeLine if you like. In fact, now Iíve written that I quite like it myself, a Busy BeeLine it is, a whole new genre for the website. Canít be badÖ
Last things first, youíll already know Iím sure that the Thursday before the Easter break was chosen for the publication of this yearís Finance Bill. I donít know what it is with the Government guys these days, but they always seem to drop the heavy pension stuff on us just a few hours before weíre all off for a break. Iím sure itís coincidental, but itís odd though isnít it?
The Finance Bill had a number of pension items in it, most of which we were expecting anyway, and it is still to be followed with clarification on what the Revenue were on about when they announced those 49 changes to the 2004 Finance Act a few weeks ago (you can read the BeeLine on the†49 amendments here if you like. Itís a free country.) Specifically, though, the Finance Bill incorporated some of the following bits and bobs:
- It changed the way annuities will work in future by making provisions to allow one-off increases†and transfers of annuities between providers†for example.
- It confirmed that schemes with fewer than 50 members will not have to purchase†scheme pensions through an insurer.
- It changed the rules covering dependantsí pensions and added more flexibility to schemes so that, in some circumstances, dependantsí scheme pensions can be reduced or terminated.
- It also amended the rules on Alternatively Secured Pensions and Unsecured Pensions to allow a bit more flexibility where assets are moved between arrangements within one scheme for an individual.
All of these and a few others I havenít mentioned are really filling in some of the detail of things already announced last year and weíll be getting chapter and verse on them once the Finance Act 2005 sees the light of day.
The process for that happening seems to be something like this. The Second Reading of the Finance Bill is scheduled for Monday 11 April 2005. We will then get a Finance Act that may be published in two parts, one before the election and the other soon after. This isnít unusual in an election year. My guess is well get a smallish Part 1 covering all the necessary stuff to start off with and then a thumping great Part 2 with all the non-urgent stuff later on. Itíll be this second part that the pension stuff will be in Iím sure as none of it is urgent.
The other Parliamentary stuff that caught my eye last week included a fairly good exchange between the Conservative MP, Nigel Waterson, and Malcolm Wicks, the current Pensions Minister. The question was whether the Government had yet been able to estimate how many people have lost their pensions through insolvency since 1997, and the Minister produced some more up-to-date figures as a result.†You can get†a copy of†that part of the debate by following this link:
The next question, again aimed at the same Minister, came from Pete Wishart of the SNP. He asked the seemingly naÔve question of what exactly are the initiatives that the DWP has taken to encourage business investment in company pensions. Simplification and good practice seem to be the key elements of reform, but you can read it for yourself by following this link:
The most interesting exchange, though, came when Malcolm Wicks was questioned on contracting-out and the value or otherwise of the rebates offered to people. This time the question was from the Labour MP, Gisela Stuart, and anyone interested in contracting-out should really read the response. It follows here:
A number of press releases were put out just before Easter too and I have included links to them here for anyone who is interested. The first was from the Department for Work and Pensions (DWP) and concerns the way pensions will be treated on takeovers within the revised terms of the Transfer of Undertakings (Protection of Employment) Regulations. These are commonly referred to as the TUPE Regulations and the new rules will require new employers to contribute towards pension arrangements for employees of companies that are taken over and where pension arrangements were already in place. As I said, I could probably write a whole BeeLine on this one topic, but you will see all the details if you follow this link to the DWP press release (and then the links it then offers to the HMSO website):
Another press release from the DWP announced consultation on the new scheme funding requirements that will replace the Minimum Funding Requirement (MFR) later this year. The following link will take you to the press release on the DWPís site if you want to get the full SP on it all:
The new Pensions Regulator got in on the press release act too by issuing a statement of its new remit and powers. The press release was timed to coincide with a speech on the subject at last weekís NAPF conference and you can read all about it by following the next link if thatís what turns you on:
Finally, your man Alan Johnson, the Secretary of State for Work and Pensions put out a press release on Wednesday last week pointing out why there is now more choice, opportunity and prosperity for pensioners. It is a two-page affair that puts the continued existence of the means-tested Pension Credit in little doubt, but sadly does not acknowledge the fact that this necessary boost for existing pensioners is itself creating the distribution crisis we are currently held in stalemate by as we try to distribute pensions to those who donít have them. Still, you might want to read it, so Iíve added the link here:
All information included has been produced by us for our own purposes and the results of it are being made available only incidentally.
- Press release from the†DWP dated 21.3.05 - Wicks - changes to provide pension protection in takeovers
- Press release from the DWP dated 23.3.05 - Consultation on implementing the new requirements for funding defined benefit pension schemes
- Press release from the Pensions Regulator dated 22.3.05 - The Pensions Regulator presents new remit to NAPF ahead of A-Day
- Press release from Alan Johnson, Secretary of State for Work and Pensions dated 23.03.05 - More choice, opportunity and prosperity for pensioners