3 September 2010 The rules on pension scheme employer-related investments (ERI) are changing. The DWP announced yesterday (2 September) that it has laid regulations before Parliament amending the 2005 Investment Regulations so that, from 23 September, pension scheme investments in certain pooled funds are no longer excluded from the 5% limit on employer-related investments. So what will this mean for trustees?
Cashing out small pensions, the lifetime allowance and the law of unintended consequences
2 September 2010 Helen Powell
Quite a few of our clients have already cut scheme administration costs by cashing out low value benefits, including pensions in payment which in some cases cost more to pay out each year than the annual pension is actually worth. Other clients are still thinking about it – but change is in the wind and it would be sensible to act sooner rather than later.
RPI/CPI indexation for pensions – Oh what a mess!
6 August 2010 Däna Burstow
One week it’s the turn of the public sector and the next week it’s the private sector being told that CPI (the Consumer Prices Index), instead of RPI (the Retail Prices Index) will be used to calculate minimum:
(i) revaluation of pensions in deferment up to retirement age; and
(ii) indexation of pensions in payment.
But what does that mean in practice?
It’s the law of unintended consequences for many. For those pension schemes that have RPI hard-wired into their rules the implication is that members will receive the better of the two – one to comply with the rules, the other to comply with statute. Surely this cannot be intended? The policy seems to have been introduced to ease funding burdens, not increase them.
The Pensions Regulator and the need for employer covenant reviews
23 July 2010 Gareth Soanes
In recent years, few topics seem to have risen so regularly to the top of the pensions “hot topics” pile as that of the employer covenant. And rightly so, you might reasonably think. But despite Regulatory guidance, do pension scheme trustees and employers actually feel confident that they know just how often their covenant should be reviewed, by whom or to what level of detail? I’m not sure. Read the rest of this entry »
The Pensions Regulator issues its first contribution notice
5 July 2010 Caroline Overton
The referee cracks down on obvious fouls
Over five years after the introduction of its so-called moral hazard powers, the Pensions Regulator has issued its first contribution notice. Michel Van De Wiele N.V. – the Belgian parent company of insolvent UK subsidiary Bonas UK Limited – has been ordered to pay £5.089 million into the Bonas Group Pension Scheme. This amount would take the scheme to a position of solvency on the PPF funding basis, so avoiding a call on the PPF. This tour de force by the Regulator may suggest a change of tack and new willingness to embrace its powers. To my mind, however, this shows that whilst the Regulator may prefer intervening behind the scenes to exercising its powers, it is not afraid to blow the whistle where there is an obvious foul. Read the rest of this entry »
