PENSIONS NEWS

Aries monitors every development in new and proposed legislation and official guidance.   Clients are kept up to date via the website, email alerts and tweets.   Aries serves as a one-stop source of intelligence on everything that is going on and coming up.   Aries doesn't miss anything of significance.

Here is a selection from our most recent headlines. You can get the fuller details by sending us an email - just click here to fire one off.

  HMRC AMENDS INFORMATION REGS
In mid-November 2017 primary legislation was passed to confirm the 60% reduction to the Money Purchase Annual Allowance . Today the long-expected amendments to align the Provision of Information Regs (SI 2006/567) were laid.

The Registered Pension Schemes and Overseas Pension Schemes (Miscellaneous Amendments) Regulations 2018 (SI 2018/5) change the limit in Regs 14ZA (3)(b) and 14A (9)-(10) from £10,000 to £4,000.

A similar amendment is also made to The Pension Schemes (Information Requirements for Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pensions Schemes and Corresponding Relief) Regulations 2006 (SI 2006/208 Reg 3AA(3)(b)).

These amendments have retrospective effect to 6 April 2017.

This SI also introduces a new Reportable Event 20A where a scheme ceases to be

or becomes a Master Trust scheme, with effect for tax year 2018/19 and subsequent tax years.

These Regulations come into force on 30 January 2018, after which date the Pensions Tax Manual will be updated.

Online Event Reporting

It is to be hoped that HMRC can . . .

09 Jan 2018  

  BULK TRANSFERS: WITHOUT CONSENT TO SCHEMES THAT WERE NEVER CONTRACTED-OUT
The DWP has launched a consultation seeking views on draft Contracting-out (Transfer and Transfer Payment) (Amendment) Regulations 2018 (Annex A), which should come into force on 6 April 2018.

The regulations enable bulk transfers of GMPs and section 9(2B) rights (active, deferred and pensioner rights) to take place in certain circumstances without member consent, to schemes that have never been contracted out - which has

no longer been possible following the introduction of the new State Pension on 6 April 2016. This has frustrated some employers and schemes seeking mergers and acquisitions or transfers within the same group of companies.

Conditions of the transfer will be that:

  • the rights of the member are not adversely affected; and
  • the same protections must be provided by the new scheme (for

example, revaluation and indexation) that would have been afforded to members if the transfer were to a formerly contracted-out scheme.

The receiving scheme need not necessarily be a newly-established scheme (though it generally will be) but it must be a salary-related scheme.

Back in April 2017, the DWP promised . . .

08 Jan 2018  

  PENSION SCHEMES NEWSLETTER 94 & COUNTDOWN BULLETIN 31
2017 closed with HMRC's usual end-of-the-month Pension Schemes Newsletter.

The first section highlights the earlier Relief at Source for Scottish Income Tax Newsletter and reiterates that for 2017/18 onwards, annual returns of individual information (ie the RPSCOM100(Z)) must not be submitted on paper. USB, CD or DVD will be OK up to April 2019, but from that date the only route will be through SDES.

As the annual return of individual information will be a statutory requirement for schemes operating relief at source, HMRC will no longer need to issue information notices.

On applying the residency tax status in cases of transfer, HMRC has backtracked on something previously said in PSN 90. It said that if a scheme administrator takes over an existing scheme where the membership stays the same, residency tax statuses provided by the ceasing

administrator could continue to be used or the residency tax status look up service could be used.

This is not the case: the scheme administrator should continue to use the residency tax statuses provided by the ceasing administrator for the current tax year. The look up service should not be used to change member's status in year. The residency status must be applied . . .

04 Jan 2018  

  AUTO-ENROLMENT REVIEWED
As promised, the Government has published its - 138 page - AE Review setting out proposals to "maintain the momentum" that has pioneered the shift in workplace pension saving as a result of automatic enrolment (AE). Crucially however, the government does not expect to implement these changes until the mid-2020s. Whether this "momentum" will survive beyond next April's 300% increase in minimum employee contributions is presently an open question.

The proposals can be summarised as:

Reducing the lower age limit

The Government proposes to reduce the AE eligibility threshold from age 22 to 18. It believes that this will reinforce the norm that the majority of young people will start to pay into a pension from their first pay cheque and will also reduce the risk of an individual making a conscious decision not to save for retirement. Time will tell if it actually creates a norm of opting out

after reading the detail of that first pay slip.

The upper age limit will remain aligned to State Pension Age (SPA), but this will be kept under review.

Remove lower limit on earnings for calculating contributions

The Review proposes that, for the purposes of the AE thresholds, the . . .

27 Dec 2017  

  DWP RESPONDS ON THE FAS LONG SERVICE CAP; PPF CONFIRMS 2018/19 LEVY
The DWP has published in detail the official Response to an earlier consultation on legislation to create the Financial Assistance Scheme long service cap.

One respondent suggested the draft Regulations should be amended to include a definition of pensionable service. The Government does not believe that is essential and also points out that the FAS scheme manager has the power to issue guidance to individual schemes on matters which are relevant to their scheme, so

they understand which periods of pensionable service are within scope.

The consultation document contained a proposal to amend the FAS Regulations so that pensionable service accrued in the member's own right and a pension credit arising from a divorce or dissolution settlement would not be added together for the purposes of the increased cap for long service. The Government now acknowledges that applying this policy would require significant changes to

the way in which FAS assistance is calculated overall. The proposal has been dropped; benefits attributable to a pension credit and pensionable service will continue to be added together for both the increased cap for long service and the standard cap.

Aries comment
This decision creates a discrepancy between the long service cap rules applied by the PPF to those eligible for
. . .

27 Dec 2017  

 
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