Ian Neale, Aries Director, is a frequent contributor to the debate in the national pensions press.  Dave King and Gareth Stears, Aries Technical Consultants, also contribute.  Read their incisive commentary, and share unique insights into the problems and opportunities of pensions in the UK.  Here is a recent sample to get you copied in.  Ian,Dave & Gareth welcome your response - just click here to send an email.


in CIPP Professional

Gareth Stears explains what is required and what is best practice when in the awkward position of asking for money back

In pensions, paying someone too much can prove as unpopular and controversial as paying them too little. This is because schemes usually need to ask for the money back. I've been involved in more exercises to correct overpayments - as an administrator and as a mediator for the Pensions Ombudsman Service - than I care to remember. Let me tell you, it isn't much fun for schemes either.

Pension trustees have a duty to ensure their scheme is administered in line with its rules. This includes paying the correct level of benefits. They also have a duty to act impartially. If one member receives (and gets to keep) more than they are due, this could be at the expense of other members. Therefore, overpayments usually require some corrective action, including changing any ongoing payments to the right level and asking members to return any excess they weren't due. It doesn't matter whether the scheme made the mistake.

Schemes will sometimes make an exception. They might write-off overpayments if the cost of recovery is likely to exceed what they expect to receive back. It can be expensive if members are non-responsive and recovery is only possible through the courts. Sometimes trustees can make a claim against their professional advisers instead, or ask for an indemnity from the scheme's sponsoring employer.

Responsive members have some legal defences against recovery too. Sometimes they can even secure the right to an incorrect benefit going forward. . . .

01 Sept 2019   Read the full article


in Pension Funds Insider

There's been some talk lately of the need to pay more attention to our financial wellbeing, alongside physical and mental wellbeing. Research has shown we're in even worse shape, financially, than physically or mentally.

It can be difficult to find a financial adviser, though (especially one willing to advise on a Defined Benefit transfer). Trust in the profession is lacking. Even if you can access professional financial advice, it costs a lot of money.

That's why I've recently proposed the formation of a National Wealth Service.

The NHS was set up in 1948 to provide physical and mental healthcare free at the point of contact, for the majority who could not afford to 'go private'. A national network of financial advice centres by analogy could provide 'wealthcare' and massively improve our financial wellbeing.

The problem at the moment is that that while there is guidance around to tell us what we could do, we're more likely to want to know what we should do – meaning advice. A bewildering array of choices is no help if we don't understand what they mean. And making the wrong choice could be very costly.

Early reactions to my idea have mostly been along the lines of 'great idea, but never likely to happen'. Well, I've got news for the sceptics: it's already happening! For some years now there's been a network of debt advice centres, coordinated by the Money Advice Service, MAS (note that important word 'advice').

By definition though, debt advice is what you might need when you are already financially very ill. Common sense says . . .

23 July 2019   Read the full article


in Professional in Payroll, Pensions & Reward (CIPP)

Why and how pensions has become so complicated

Workers and employers pay contributions into pension schemes building funds out of which the schemes pay money to the workers to live on in retirement. What's complicated about that?

The answer in part is all the rules and regulations that encumber the process. Fifty years ago, however, pensions legislation hardly existed: just 29 pages in the Income & Corporation Taxes Act 1970. Even by 1988 it was still only 57 pages. However, the Inland Revenue (now HM Revenue & Customs (HMRC)) enjoyed wide discretion in interpretation, and its published guidance was already becoming very complicated.

Tax legislation sets the ceiling; social security law the floor. Prior to the Social Security Act 1973 that introduced preservation, there was no protection for pensions. The remorseless deluge since was fuelled by contracting-out; the clean- up operation - reconciliation of and now equalisation for guaranteed minimum pensions - will go on for years.

The 'Maxwell' scandal triggered the massive Pensions Act 1995, introducing sweeping new controls with a regulator (the Occupational Pensions Regulatory Authority), multiplying trustees' responsibilities. The Welfare Reform and Pensions Act 1999 introduced stakeholder pensions and pension sharing on divorce - arguably the most spectacularly tangled web of legislation ever woven. Pensions legislation twenty years ago had grown to 2,000 pages. Who could remember it all?

Then in December 2002 the government published proposals for a genuinely radical simplification . . .

July 2019   Read the full article

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