THE PENSIONS DEBATE

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.

  THE TAPERED ANNUAL ALLOWANCE

in Professional in Payroll, Pensions & Reward (CIPP)

Ian Neale argues the TAA must go

The disquiet among National Health Service (NHS) consultants and GP practice partners has forced ministers to pay attention to the tapered annual allowance (TAA), which the government admits could affect a third of senior NHS employees. The TAA applies to 'high-income individuals' for the relevant tax year: broadly the same class who were subject to the special annual allowance

for the 2009/10 and 2010/11 tax years (provisions which, ironically, were repealed by the incoming coalition government in 2010 because they were too complicated).

A member of a registered pension scheme with an income of over £150,000, including the value of any pension contributions, will be a high-income individual unless their income excluding pension contributions does not exceed £110,000 – the 'threshold income'. The income including pension contributions is referred to as 'adjusted income'.

The taper's effect is to reduce the individual's annual allowance (AA) by £1 for every £2 that the adjusted income exceeds £150,000 with a maximum reduction of £30,000. That is to say, whilst the AA remains at £40,000, all members of a registered pension scheme affected by the taper will have a TAA of at least £10,000. A person with an adjusted income of £210,000 or more will have the minimum TAA.

The calculations can be quite complicated: various deductions and add-backs might have to be factored in. Anti-avoidance rules apply so that any salary sacrifice, or flexible remuneration, arrangement set up after 8 July 2015 will be included for the purposes of the threshold income. . . .

01 Oct 2019   Read the full article

 
 
  WHAT ARE WE WAITING FOR?

in Pension Funds Insider

Ian Neale looks at pending legislation and discusses the impacts of the current political environment.

To say we live in uncertain times is both a cliche and an understatement. Very little by way of new legislation that is not related to Brexit has emerged recently, even in draft form. We have no clear idea of the date to expect the next Queen's Speech, which traditionally foreshadows the government's intentions to legislate in the forthcoming parliamentary session

A queue has formed, though; and we know what the Pensions Minister Guy Opperman will be pushing for. Indeed, he might already have got the DWP busy on drafting provisions for his ambitious Pensions Bill. Collective Defined Contribution (CDC) Schemes is one racing certainty for inclusion, following assurances given to Royal Mail and the CWU.

Other prominent candidates include new powers for The Pensions Regulator (TPR) to authorize and regulate Defined Benefit (DB) consolidation vehicles ('superfunds'). Changes to the DB funding framework are expected, following the DWP's March 2018 White Paper, strengthening TPR and obliging trustees to adopt a long-term objective. A new draft Code of Practice on DB funding has also been promised, in which TPR will be looking to set clearer parameters around journey plans and associated technical provisions.

Less publicised candidates for inclusion in the Bill include provisions to extend the powers of The Pensions Ombudsman to facilitate early resolution of disputes before a determination, and to allow an employer to make a complaint or refer a dispute, . . .

23 Sept 2019   Read the full article

  RECOVERY - FIXING PENSION OVERPAYMENTS

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

Do you agree? Click here to send your response, question or challenge to Ian

 

Aries Insight Features
Aries House
29 Station Road, Desborough, Northants NN14 2RL
Tel 01536 763352
email: ian@ariesinsight.co.uk

 
ARIES BENEFITS
INFORMATION
INSIGHT
INSTRUCTION
INFLUENCE
INCLUSION
INTEGRITY
OUR OFFER