UK - Consultants are sceptical over the government's pledge to relax section 67 of the Pension Act 1995.
The section was intended to buttress trust law by making it impossible to revise accrued pension entitlements and safeguarding past benefits.
But experts say that in practice it imposes a “rigid straight jacket” on schemes and prevents sensible tidying up of accrued pension history.
Work and pensions secretary Andrew Smith (pictured) – speaking during the second reading of the Pensions Bill – told MPs that the government would “allow the rationalisation of accrued rights”.
But critics say Smith’s words are prefixed by a caveat.
Hewitt Bacon & Woodrow associate Kevin Wesbrooom said: “His wording states ‘subject to ongoing work’.
“It is a pretty weak commitment and an effective loophole for the government to jump through, if it ultimately decides to do nothing.”
Consultants say the government is only starting to spot the legal problems involved in trying to override trustee rules. And experts believe ministers may well backtrack on Smith’s promise if it proves too time consuming or complicated.
Wesbrooom said: “Rationalisation of accrued rights means redrawing the line – and some people will lose out.
“Whenever you simplify like this you run the risk of creating a category called ‘losers’. And the government is just spotting some of the practical difficulties in redefining the lines in legislation.”
Mercer Human Resource Consulting European Partner Tim Keogh agreed the government was hesitating. “Fundamentally, the government has to accept that some people will be losers in a relaxation of section 67.”
Simplification Report author Alan Pickering – underlined his disappointment after the clause was overlooked in the Pensions Bill – and accused the government of lacking “bold and radical leadership”.
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.