Posts by Laura

Laura Cumming

The Spence team has sifted through all the industry changes and trends from the last quarter, picked out the highlights and condensed it into a snappy report for you to download. Each update briefly summarises what you need to know, and clearly sets out the actions you need to take, saving you hours scouring through multiple reports, press releases, blogs and articles.

Some key updates to keep an eye out for are:

  • HMRC’s vital VAT judgment; this could see schemes recover VAT on investment management costs
  • PPF levy costs; the PPF’s recent announcement on the 2015/16 levy is fundamental to your scheme’s PPF levy cost
  • Contracting Out; make sure you are keeping in line with the HMRC’s most recent update to ensure you are ready for the abolition of contracting out.

Download your copy of the Pensions Quarterly Update report here.

If you have any questions, please don’t hesitate to get in touch with your usual contact or the Spence team.

 

Laura Cumming

I recently had a need to review the Regulator’s Guidance on Incentive Exercises which was updated in December 2010. While on the face of it the principles are not too different to the original guidance I thought it worth re-iterating a few of the main points.

An Incentive Exercise (formerly known as an Inducement Exercise) is where an offer is made by an employer to a Defined Benefit scheme’s members to transfer out or amend benefits, usually in return for some form of financial incentive, with the intention of reducing liabilities or risk in the scheme.

These exercises remain a viable starting point for any company tackling the funding levels of a Defined Benefit (DB) scheme and, as long as they are dealt with in accordance with the Regulators guidance and with the input of the Scheme’s Trustees, offer an attractive alternative to many members if pitched at the right level.

The Pensions Regulator tells Trustees Read more »

Laura Cumming

Trustees and ETVs

I read with interest that trustees should not get involved in Enhanced Transfer Value exercises (ETVs). I would agree that it should not be the position of the trustee to question the reason for such an exercise (is there a reason other than de-risking?) however, I am in full support of trustees reviewing communications to members to ensure that the guidance from the Pensions Regulator has been followed and that the offer is fully explained to members with the necessary notes of caution included.

Without trustee review the ETV runs the risk of being overturned at a later date with consequent additional cost to review and ‘fix’ any problems.

Of course if a trustee does not have an opportunity to review the ETV offer a trustee could elect to send its own communication to members but quite frankly this could do nothing other than confuse an already complicated matter.

See UPDATE on ETVs reflecting the July 2010 Guidance.

Laura Cumming

Another change in administration procedures coming up soon!
Earlier in the year the Registered Pension Schemes (Authorised Payments) Regulations 2009  came into force, forgiving the tax penalty on certain payments which were previously deemed unauthorised, e.g. payments made in error and payments of arrears of pension due after the death of a member.
From 1 December 2009 these regulations allow occupational pension schemes to commute trivial pensions, in certain circumstances, without any reference to the benefits a member may have in other unrelated pension schemes or contracts. This will be limited to pensions with a capital value of less than £2,000. The usual taxation procedures will apply.
Unfortunately these regulations do not apply to individual insured arrangements so sadly another blow to the ‘one size fits all’ regime affectionately known as Pensions Simplification!

Laura Cumming

The Press has recently been full of reports about the working population having the freedom to work past 65 with a removal of compulsory retirement ages in the workplace. Strangely, everyone I speak to in their 40s and 50s is afraid that such a move will see them coerced into continuing to work “just for a few years more” Read more »

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