Draft Taxation of Pensions Bill
HM Revenue and Customs have published a draft Taxation of Pensions Bill dealing with the tax changes required for the new flexible access for defined contribution pension pots. Other aspects, such as the associated guidance guarantee, are being introduced via amendments to the Pension Schemes Bill which is already working its way through Parliament.
The HM Revenue and Customs consultation may be found at www.gov.uk/government/publications/draft-legislation-the-taxation-of-pensions-bill.
Auto-enrolment compliance update
Figures published by the Pensions Regulator in its monthly ‘declaration of compliance (registration) report’ show that more than four million workers have now been automatically enrolled into a workplace pension.
Its first quarterly ‘compliance and enforcement bulletin’ also shows that the regulator used its powers (to ensure employers comply with their automatic enrolment duties) on twenty three occasions up to the end of June this year.
Both documents, along with other reports on the impact of automatic enrolment may be found at www.thepensionsregulator.gov.uk/doc-library/research-analysis.aspx.
Settlement reached in Lehman Brothers case
A settlement has been reached in the case of the Lehman Brothers UK pension scheme which will allow the full retirement benefits of members to be bought out, thus avoiding the scheme’s entry into the Pension Protection Fund (PPF). The settlement figure (the estimated buy-out shortfall) is expected to be £184 million, the largest sum paid to a scheme as a result of the regulator’s actions so far.
Lehman Brothers became insolvent in September 2008. Two years later, the Pensions Regulator imposed Financial Support Directions (FSDs) on various companies within the group. In July 2013, the Supreme Court ruled that FSDs were effective against insolvent targets, and later that year the High Court ruled that the regulator was not limited to the shortfall amount when imposing FSDs on multiple targets.
Interim chief executive of the Pensions Regulator, Stephen Soper, said: “This is a pleasing and appropriate settlement for the 2,466 members in the Lehman Brothers pension scheme, and shows we will not hesitate to pursue regulatory action to protect members’ benefits and PPF levy payers where we believe it is appropriate.”
Details of the case and the settlement are available at www.thepensionsregulator.gov.uk/docs/section-89-lehman-brothers.pdf.
The trustees of the PGL (Phoenix Group, formerly Pearl Group) Pension Scheme have entered into a £900m longevity swap with Phoenix Life Limited. This follows transactions for BT and Aviva which also involved an insurance vehicle associated with the scheme sponsor.
Rothesay Life has completed the £500m buy-out of the Western United Group Pension Scheme, a scheme for current and former employees of the Vestey Group. The scheme has around 14,000 members.
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