Ian Neale, Aries Director, is a frequent contributor to the debate in the national pensions press.  Read Ian's incisive commentary, and share his unique insights into the problems and opportunities of pensions in the UK.  Here is a recent sample to get you copied in. Ian welcomes your response - just click here to send him an email.


in Pension Funds Insider

Ian Neale discusses the alternative to simply banning foul behaviours and looks at more successful preventions.

By common consent the legislation we are bound by is unduly complex, convoluted and too damn much. Some of it is undoubtedly necessary. A lot could be improved by better drafting: a focus on the wood as well as the trees. We can all think of laws we could well do without, though. Regulations that address an imagined offence, of which the government produces little or no evidence that it actually happens or is likely to happen, are one example. 'Just-in-case' is no good reason for swelling the statute book.

Good legislation should not only be evidence-based; it should be enforceable – and enforced. In 2006 a government obsessed with the idea that everyone would recycle their tax-free cash back into a pension scheme decided to ban recycling. That legislation was a joke: it had no effect, because it was unenforceable. To be caught, you had to shop yourself.

Other legislation while in principle enforceable, is brought into disrepute by not being enforced. Think back to the introduction of stakeholder pensions: employers had merely to designate a scheme. How many were prosecuted for failing to take that simple step? One, and only then because, again, he self-reported.

This issue has been raised again by the government's new plan to ban cold calling about pensions, in response to their consultation about pension scams. It bears the hallmarks of a knee-jerk reaction to undesirable behaviour: . . .

22 Sept 2017   Read the full article


in Pension Funds Insider

Ian Neale discusses the challenges facing the latest Pensions Minister, Guy Opperman.

The latest MP to move into the hot seat of Pensions Minister, Guy Opperman, is commencing a steep learning curve – like almost all his twelve predecessors since the post was created in 1998.

If we except Steve Webb, who served for five years, the average tenure of pensions ministers has been just fifteen months. Like Mr Opperman, most have had no background in pensions and little time to get to grips with their brief.

Mr Opperman's new boss on the other hand, Secretary of State for Work and Pensions David Gauke, has transferred from HM Treasury, where in seven years as a minister he must have had some exposure to pensions policy - particularly the controversial subject of tax relief.

Mr Gauke was a senior colleague of George Osborne when in July 2015 the Chancellor threw all the cards in the air with his Green Paper on pensions tax relief. Thankfully, the outcome of that exercise was 'no change for now' (although Mr Osborne clearly felt miffed at being told there were some difficulties in reversing the EET – exempt-exempt-taxed – principle). All we suffered was the distraction of LISA in the March 2016 Budget.

The Treasury's dream has not evaporated though. The fact that we have an apparently slightly more pragmatic Chancellor in Philip Hammond doesn't mean the departmental culture has changed. . . .

28 July 2017   Read the full article


in PMI News

NOTE: This article is based on draft legislation in the Finance (No.2) Bill 2016-17 and accompanying HMRC guidance, and represents the position at the time of writing (31 March 2017).

In recent years HM Revenue and Customs (HMRC) has become increasingly vexed by the extent of opportunistic arbitrage involved in pension transfers overseas. In their eyes – and those of many in the industry – the statutory right to transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS) when retiring to live abroad was being abused – for the perceived tax advantages.

Conditions to be met were twice tightened, in 2012 and again in 2015, when the list of overseas schemes which had asked to be listed by HMRC as meeting the requirements to be a QROPS was re- labelled the ROPS list. This increased UK scheme administrators' concern about the risk of a scheme sanction charge should HMRC subsequently decide the overseas scheme never was a ROPS (let alone a QROPS). Due diligence was difficult, challenging, and costly.

HMRC has now decided to align the tax treatment of registered pension schemes and overseas pensions. Draft regulations will scrap the '70% rule' (which has required overseas schemes to use at least 70% of funds that have received UK tax relief to provide the individual with an income for life) and amend the pension age test to allow for payments to be made before age 55, where the payment would be an authorised payment if paid by a registered pension scheme. . . .

07 July 2017   Read the full article

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