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BeeHive  >  BeeLines  >  What’s Buzzing in Pensions? Nearly October 2005

What’s Buzzing in Pensions? Nearly October 2005

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Conference defeat for Government on pensions

As the annual Labour Party conference drew to a close this week the Government suffered a double blow on pensions when the party conference backed trade union motions criticising its pension policy.

Two votes went against the Government. Firstly the party members at the conference agreed with a trade union motion demanding compulsory pension contributions from employers and for the Basic State Pension (BSP) to be increased in line with the general increase in earnings in the future. The second hit came from the party conference attacking the Government’s plans to either raise the retirement age of public sector workers, or get them to pay more towards their pensions (or both). 1 As I’ve said before, this one will run and run. Anybody who’s reached their boredom threshold with the subject already would be well advised to stop reading the papers and watching the TV news for six months or so I would say.


Institute of Directors says retirement age should be raised to 70

More doom and gloom for those of us who planned to spend a bit of our time (at least) on Earth with our feet up. The Institute of Directors (IoD) has this week piled into the pension debate with a suggestion that what they call the ‘pensions impasse’ could be solved by raising the age of retirement to 70. It’s not their only target though. They would also like an end to means-testing and would like to see ‘gold plated’ public sector schemes knocked on the head. The IoD’s submission to the Pension Commission, which is where all this came from, says there are four big issues affecting pensions:

  1. an ageing population
  2. incentives for saving
  3. the State Pension, and
  4. public sector pensions

The specific points made in the IoD submission are that there should be:

  • a progressive reduction in Stamp Duty on equity transactions for pension funds
  • a boosting of the incentives of later retirement by linking longer working lives with the level of the tax-free lump sum
  • closure of public sector defined benefit schemes to new entrants
  • annual publication of total future liabilities of public sector schemes
  • a gradual raising of the retirement age to 70
  • an end to means-testing for the State Pension by setting a new universal level of £110 per week

So there you have it, a fairly big Christmas list I suppose, but quite a lot of it strikes a chord or two with what I think. I’m particularly taken by the idea that public sector schemes should be treated more like private sector schemes and not so much like a company whose employer has bottomless pockets. 2


Cross Border pension schemes

In an already busy week, the Department for Work and Pensions (DWP) has published some more draft pension Regulations (yawn!) for even more consultation. I mean, are we the most consulted people in the whole world or what? Anyway, this time it’s all about cross border pension schemes and it’s all to do with the fact that the Pensions Act 2004 dropped the cross border requirements of the European Pensions Directive slap in the middle of UK law. These Regulations are referred to as The Cross Border Activities Regulations 2005 and cover, amongst other things, schemes with an overseas parent and UK schemes that have employees on secondment outside of the UK.

Having flicked through it all, though, I would say there’s still a fair bit of detail to be hammered out, like what exactly is a cross border scheme for a start. There doesn’t seem to be a definition. And anyway, schemes won’t get the cross border tag automatically; they’re going to have to apply to the Pension Regulator for it if they and their employees want to take advantage of any of the provisions of the Directive and the Regulator’s yet to publish any guidance on this.

I don’t think I’ve got the time or energy to write this up in detail right now, but if any of you want to read all about it you can get hold of the consultation document by hitting the following link:

DWP - Cross Border Activities Regulations 2005

Yet more draft Regulations

Without wishing to bore, or even frighten, you I suppose I should at least mention a few other draft Regulations that have spilled out of the Government trees to pension paper machine in the last week or so. I won’t go through them in any detail, but just want you to know where they are if you’d like to follow up on any of them.

They’re all to do with the so-called tax simplification legislation and they’ve all been issued by HMRC.

The first one I noticed was The Registered Pension Schemes (Relief at Source) Regulations 2005. These draft Regulations deal with the tax reliefs applicable to registered pension schemes (things like relief at source and the information that scheme administrators need to provide for the HMRC people and all that sort of thing). You can get hold of the draft Regulations through this next link:

HMRC - Registered Pension Schemes (Relief at Source) Regulations 2005

If that’s not enough to keep you busy for awhile you could always look up The Registered Pension Schemes (Provision of Information) Regulations 2005 if you like. These draft Regulations are all about the annual information requirements on scheme administrators when reporting to the HMRC guys and all the records schemes will be expected to keep in the future. You can get a copy of the draft Regs here:

HMRC - Registered Pension Schemes (Provision of Information) Regulations 2005

And just to finish off this particular hat-trick, those of you wishing to take the match ball home will need to also have a glance at The Pension Schemes (Transitional Provisions) Order 2005 – Transfers and Wind-ups secured by Individual Contracts of Insurance. These draft Regs are concerned with the preservation of low retirement ages (below the new Normal Minimum Pensions Age) on transfer and the special conditions that will need to be met. Worth looking up if that’s your bag. You can get to see these draft Regs at:

HMRC - Pension Schemes (Transitional Provisions) Order 2005


And finally…

This has been a busy week for me all in all what with Bob Dylan being on the telly till late every night and all the travelling I’ve had to do to get to my various speaking commitments all around the country and reading and writing about all this pension stuff and having had to watch a few games of football too. I’m pretty much wrecked at the moment, but I was really cheered up this morning by the good news that the BeeHive is going to get a ‘E-Mail to a Friend’ facility so that you will be able to send interesting stuff from the BeeHive to your friends whenever you like. Obviously this will depend on you not only having friends in the first place, but also on your judgement of whether they are likely to remain friends with you if you start sending them pensions stuff by e-mail. It’s a tough call, I know, but if you feel you could do your bit to help spread the word of the BeeHive without alienating yourself from too many of your friends and associates we’d appreciate it.

Steve Bee

30 September 2005

1. Financial Times, Thursday 29 September 2005 - "Leadership hit by defeats on health and pensions", by Ben Hall, Christopher Adams and Nicholas Timmins
2. Institute of Directors - Press Release dated Monday 26 September 2005 - "Strong Medicine needed on Pensions Reform, says IoD"

Any research and analysis included has been provided by us for our own purposes and the results of it are being made available only incidentally.