UK - Chancellor Gordon Brown's decision to axe advanced corporation tax has cost pension schemes almost £30bn, the Institute for Fiscal Studies claims.
ACT – which allowed schemes to take dividends from their equity investments tax-free – was scrapped when Labour came to power, a move the IFS believes has progressively taken more and more out of schemes’ coffers.
The IFS says scrapping ACT brought the Treasury £2.3bn when it was first abolished in the 1997-98 financial year.
By 2002 the figure had risen to £5.9bn and the IFS expects it to top £6.2bn by the end of the current tax year.
Both the Conservatives and trade unions have condemned the removal of ACT, labelling it a “stealth tax”, which has prompted the demise of final salary schemes.
However, Mercer Human Resource Consulting senior consultant Deborah Cooper disagreed.
She said: “The removal of ACT is not the killer fact. The writing was on the wall. The effect of increased longevity and interest rates has increased liabilities. It’s those concerns, rather than any investment concerns.
“Everybody is aware of the removal of ACT, and you should be making different investment decisions because you know you are not going to get any tax relief. This is not something at the forefront of our minds.”
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.