Government unveils Pension wise
The government has unveiled the name and logo to be used for the new guidance service that Chancellor of the Exchequer George Osborne promised would accompany the pension freedoms coming into effect for defined contribution schemes in April 2015.
Pension wise (www.gov.uk/pensionwise) will provide free and impartial guidance for savers approaching retirement, either online, face to face or by telephone. The service will be delivered by the Citizens Advice organisations and The Pensions Advisory Service.
Economic Secretary to the Treasury Andrea Leadsom said “We want people to be empowered to make informed and confident choices. Pension wise is a distinctive brand, making it easy for consumers to know where to go for help and guidance.”
In order to protect consumers from imitators of the service and to ensure the guidance brand is trusted, the government will make the imitation of Pension wise illegal.
Consumers can now register to get early access to the service and give feedback about how the service could be improved.
Pensions Minister proposes further changes
Pensions Minister Steve Webb has floated the idea that existing pensioners should be able to cash in their annuities, in order to have the same flexibilities as will be available to new retirees after April 2015. The government has already announced that beneficiaries under a joint life annuity will be able to receive future payments tax free where the annuity holder dies before age 75, consistent with the treatment for post 2015 drawdown arrangements. Neither of these changes are likely to apply to defined benefit schemes.
ACA survey of smaller firms
The Association of Consulting Actuaries (ACA) has published a survey report into pension savings at smaller employers (those employing 1-249 employees). The report found that most employers were auto-enrolling employees that were not previously in pensions into a multi-employer scheme such as NEST with contributions at or close to the minimum rate of 1%. Most employers with pre-existing schemes have kept those arrangements for existing employees, although 15% have closed them in favour of new arrangements.
The report also calls on the government to review auto-enrolment policy after the election to avoid potential financial difficulties for smaller employers caused by the increases to minimum contributions scheduled for 2017 and 2018. A copy of the report is available at <ahref="http://www.aca.org.uk">www.aca.org.uk.
The trustees of the Nortel Networks UK Pension Plan, supported by the Pension Protection Fund, have secured £340m of funding from failed Canadian parent company Nortel Networks Limited (NNL) but have failed in their attempts to secure further funding based on the Financial Support Direction served by the Pensions Regulator on NNL (and other Nortel group companies) in 2010.
Tesco has announced plans to close its defined benefit scheme to new and existing members as part of a raft of measures aimed at savings the company £250m per year. The scheme has around 350,000 members, of which around 200,000 are current employees.
This Update should not be relied upon or taken as an authoritative statement of the law. For more information, please contact us using the details shown.