Ian Neale, Aries Director, is a frequent contributor to the debate in the national pensions press.  Read Ian's incisive commentary, and share his unique insights into the problems and opportunities of pensions in the UK.  Here is a recent sample to get you copied in. Ian welcomes your response - just click here to send him an email.


in Pension Funds Insider

Tackling the complexities of the charge cap

In pensions – as in life generally – it's almost a truism that rarely is anything as simple as it might at first seem. It's often difficult to make a clear statement without feeling a need to recognise exceptions. The ongoing debate about charging is a case in point.

"Transparency" is a keyword in our industry at the moment; particularly in the context of communications to pension scheme members. We should be better informed, not only about the value of our pension, but also about the cost of saving. This is true not only with members but within the industry itself, with complex regulations and rules surrounding the charge cap. This issue came to the fore with the advent of auto-enrolment, where success depended partly on minimising opt-out rates, and low charges were seen as a key factor in this.

Many of those auto-enrolled for the first time have joined money purchase occupational pension schemes; particularly master trusts. Consequently, since 6 April 2015, the Occupational Pension Schemes (Charges and Governance) Regulations 2015 have applied charge controls to the default arrangements of certain occupational pension schemes that provide money purchase benefits, used to meet automatic enrolment duties in relation to at least one jobholder ('relevant schemes').

Such schemes cannot require a jobholder to make any choices, such as about fund investments, so they have to provide a default fund for those who do not express an option or choice.

Trustees must ensure no member's funds in a default arrangement are subject to charges in excess of the cap. . . .

16 Apr 2019   Read the full article


in Trafalgar House Viewpoiints

The volume of pensions legislation in force has been increasing exponentially in the last fifteen years with annual Finance Acts, six Pensions Acts and two Pension Schemes Acts, plus hundreds of sets of regulations. The twin drivers have been a Treasury obsession with tax relief and the potential for its abuse, and a DWP passion to protect pension scheme members seemingly almost regardless of cost.

The rise of the Regulators has added to the burden. Initially triggered by the Maxwell scandal in the early nineties, first we got Opra and then from 2004 The Pensions Regulator. Guidance proliferated; not only explaining the requirements of legislation, but also setting out what was expected from trustees and administrators in terms of governance and compliance.

From HMRC, the few hundred pages of IR12 were replaced in 2006 by several thousand pages in the Registered Pension Schemes Manual (and now the Pensions Tax Manual). What had begun as a brave new world labeled 'simplification' rapidly became 'complification' instead.

In large measure the burden heaped upon administrators has resulted in the first place from political over-reaction to bad behavior by a few, and then the failure of attempts such as David Cameron's 'Red Tape Challenge' to reverse the tide of new legislation. The whole sad history has been entertainingly described in leading pensions lawyer Robin Ellison's magisterial survey "Red Tape".

Constant tinkering with the legislation by politicians who cannot leave things alone is not the only problem: the consequences of major policy errors can take decades to overcome. Take contracting-out for example. This failed experiment . . .

12 Mar 2019   Read the full article


in Pensions Expert

In the year ahead, the DWP, HMRC, TPR, FCA and any other arm of government with a role in UK pensions must be ready to minimise any damage and disruption arising from Brexit.

Maintaining trust and confidence in pensions should be their top priority, whatever the outcome of the political and economic uncertainty.

There are also a number of other important issues to be addressed, however. One clear priority for the Department for Work and Pensions is to secure parliamentary time in the summer for a new pensions bill This will include key enabling legislation for collective defined contribution schemes, as well as delivering the promised stronger defined benefit funding code, DB scheme consolidation, and even more powers for the Pensions Regulator.

Before it can get to this though, the government has to ensure a smooth transition of pensions guidance functions from the Pensions Advisory Service and Pension Wise to the Single Financial Guidance Body.

Sections 18 and 19 of the Financial Guidance and Claims Act 2018 – requiring members to be referred to appropriate pensions guidance before transferring or taking benefits – are among the few that are still not in force. Enabling this protection goal without making it look like a 'hoops-and-hurdles' obstacle course for members should be a priority for the Department for Work and Pensions.

The SFGB will also be responsible for implementing DWP policy to deliver a non-commercial pensions dashboard. Great hopes had been raised that people will be able to see all their accrued pension rights, including the state pension, in one place. It is now quite crucial . . .

09 Jan 2019   Read the full article

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