US - The proposed budget reconciliation bill, which will increase premiums paid by sponsors to the PBGC, are "contrary to the interests of plan participants and violate the mission of the PBGC" stipulated in ERISA, according to its committee.
In a letter to senator Mike Enzi (pictured), chairman of the senate health, education, labor, and pensions (HELP) committee, and senator Ted Kennedy, ERIC complained PBGC premium taxes are an inappropriate source for budget reductions, because they are not linked to the PBGC’s need or its mandate to keep premiums low as possible.
The letter explained: “ERISA section 4002 explicitly states that the PBGC is to maintain premiums... at the lowest level consistent with carrying out its obligations.”
Areas of concern to ERIC include; the level of increases in premiums from US$19 per pension plan participant to $46.75 (a hike of 146%); automatically indexing premium tax increases in the future; and a new premium tax of up $3,750 per participant.
“The punitive tax on emergence from bankruptcy, as much as $185.5m for a company with 50,000 employees, would likely force dissolution of most if not all companies that might otherwise emerge from bankruptcy at a cost of hundred and thousands of jobs.” the letter warned.
ERIC has accepted a premium increase was necessary but encouraged members of the HELP committee to support senator Jeff Bingham’s amendment of a $30 fee.
HMRC has confirmed providers operating relief at source pension schemes can continue to collect automatic tax relief at a basic rate of 20% under new Scottish Income Tax rules.
The Pensions Regulator (TPR) is seeking "improved" powers to set a schedule of contributions in defined benefit (DB) schemes in the government's upcoming white paper, it has revealed.
New regulatory rules which require providers and advisers to produce annuity illustrations will not solve the problem of consumer detriment as they are "fundamentally" flawed, according to Retirement Advantage.
Paul Budgen is set to join financial technology and auto-enrolment (AE) firm Smart Pension as director of business development.