UK - Over 95% of pensions schemes will offer free cash sums worth up to 25% of the fund's value on the back of the new pensions tax rules to take effect next year, a Hymans Robertson survey has found.
With new pensions tax rules coming into effect in April, 2006, the firm asked attendees at its’ pensions conference to highlight the key decisions companies had taken for their defined benefit schemes.
Some 75% of schemes will impose a scheme specific cap, while around half of all schemes will allow some form of flexible retirement, it also emerged.
Robert Inglis, senior actuary at Hymans Robertson, said the survey findings showed pension schemes were taking advantage of the new rules. “However we suspect that a lot of employers and trustees have yet to deal with all the issues – there is a lot more work to be done before A-Day,” he said.
While the revenue changes had allowed higher tax free cash sums, the valuation of pensions under the new rules would make the terms many schemes use for converting pension to cash on retirement seem unattractive, he said.
“Many schemes are using conversion factors which reflect past conditions – there will be pressure on schemes to improve terms to take account of improving life expectancy and lower interest rates,” said Inglis.
He suggested trustees take stock and review all of their factors - not just conversion factors but others such as early retirement reduction terms to ensure they reflect today’s conditions.
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.