Lamborghinis and life expectations
Following the radical pension changes announced in the budget, there have been a number of associated documents produced, including from the Pensions Regulator, HMRC and FCA. The treasury also announced that people who have recently taken a tax-free lump sum from their defined contribution (DC) pension will be given 18 months rather than 6 months to decide what they wish to do with the rest of their retirement savings so that they do not miss out on the new flexibilities.
Not to be outdone, Pensions Minister Steve Webb announced that, following the recent consultation, a 0.75% cap on charges will be introduced for the default funds of all qualifying DC schemes with effect from April 2015. Trustees and, for contract-based schemes, Independent Governance Committees (IGCs) will have new duties to consider and report on costs and charges. In an interview, Mr Webb went on to suggest that pensions and tax relief should be levied at a flat rate of 30% rather than an individual's marginal rate, although he did point out that this was not yet Government policy.
DB pension costs research
The pensions Regulator has published the findings of research examining how define benefit (DB) schemes could not identify what they were paying in investment charges, even though these represent the second largest expense for such schemes.
The regulator has also developed a charges checklist and a web tool to help trustees assess how the costs of their scheme compare with those of a typical scheme of a similar size.
The Department for work and pensions has announced the appointment of three new Trustee Members to the National Savings Trust (NEST) to replace three retiring members. The Trustee Members from the Trustee of the NEST Scheme.
The new Trustee Members are Carolan Dobson (most recently chair of the Bespak Pension Scheme), Iam Armfield (PwC) and Karen Silcock (deloitte). The Chair of NEST is Lawrence Churchill CBE.
UK Coal has announced the "managed closure" of its business by late 2015. This is despite the agreement reached in July 2013 under which the Pension Protection Fund (PPF) took on the company's pension schemes, covering 7,000 members, while enabling the business to continue trading. The PPF expects to be no worse off than if the company had passed onto the immediate liquidation last July.