7 days

7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.

In this 7 Days

NAPF publishes pension tax “myth buster”

On 24 September 2015, the NAPF issued a “pension taxation myth buster”, to “help inform the debate on the topic”, in connection with HMT’s consultation on pensions tax relief which closes on 30 September 2015.

The “myth buster” states the NAPF’s belief that a move to a “TEE” system, under which contributions are taxed, but the investment roll-up and pension payments are tax exempt, would “effectively double the administrative burden for schemes” and result in rising member charges. Further, the NAPF expresses a concern that a move to TEE now might “precipitate a future government’s move to TET”, under which both contributions to a pension arrangement, and payments out, would be taxed.

NAPF to assess the future of workplace pensions and retirement savings

The NAPF is conducting a survey on the future of workplace pensions and retirement savings, with the aim of providing the best support possible for its members. It has commissioned ORC international to undertake a survey of all NAPF members, to help shape the design and structure of new products and services.

The NAPF has emailed the survey to all members and is keen for as many as possible to complete it. Anyone wishing to take part in the research, who has not yet received a link to the online survey, should contact elizabeth.spratt@napf.co.uk.

All members who complete the survey will be offered a £10 donation to one of three charities, including Friends of the Elderly, the NAPF’s charity of choice.

NAPF announces new council members and chairs

The NAPF has today (28 September 2015), announced the appointments of Frank Johnson and Richard Butcher as chairmen of its DB and DC Councils respectively.

It has also announced the election of the following people to the Councils:

DB Council

Janet Brown, Sackers

Nicola Elder, BG Group

Nick Greenwood, Berkshire County Council

Susan Martin, LPFA

Thomas Mercier, Invensys

Mike Nixon, Finmeccanica

DC Council

David Astley, Trinity Mirror

Francois Barker, Eversheds

Dermot Courtier, Kingfisher

Emma Douglas, LGIM

Kevin O’Boyle, BT

ONS Occupational Pension Schemes Survey

The ONS published its annual Occupational Pension Schemes Survey on 24 September 2015. The survey collates information about scheme membership, benefits and contributions, and includes both small schemes and those in winding-up. State and personal pensions are not included.

Amongst other things, the survey shows that total membership of occupational pension schemes (excluding GPPs) was 30.4 million in 2014, an increase of 2.5 million compared with 2013. However, the average total contribution rate was 4.7%, down from 9.1% in 2013.

PPF consults on 2016/17 pension protection levy

On 21 September 2015, the PPF announced that the 2016/17 levy estimate will be set at £615 million (lower than last year’s estimate of £635m) and published its 2016/17 PPF levy consultation document. The consultation closes on 22 October 2015.

Whilst the levy rules “are substantially the same as those published in 2015/16”, the PPF’s proposals are intended to continue to improve the rules’ practical elements and reduce burdens on schemes.

The PPF has also announced that schemes which are no longer reporting as last man standing (“LMS”) schemes will be contacted by the PPF later in 2015 or in the levy year 2016/17 and, where appropriate, re-invoiced.

For more details, please see our Alert.

PPI report on “Transitions to Retirement”

On 21 September 2015, the PPI published the latest report in its “Transitions to Retirement” series, on “Myths and rules of thumb in retirement income”.

The research highlights the commonly used guidance “eat five portions of fruit and vegetables a day” as an example of a simple non-financial rule of thumb, that is widely recognised and understood, and in most circumstances helpful. The report looks at how rules of thumb for retirement savings (for example, “secure a basic income to meet essential needs”) might help retirees to think about and manage their DC pension pots.

A round table meeting of various pensions bodies discussed what these rules of thumb might be, how they differ from received wisdom and how they might support DC savers when setting their strategies for retirement. The report concludes that rules of thumb could – if clearly and carefully phrased – help individuals manage their DC pension pots.