UK - Key measures of the government's pension reforms package include:
- The introduction of a Pensions Protection Fund to guarantee current and deferred members 90% of their pension, and retired members 100% of their pension, when a sponsoring company becomes insolvent. This will be funded using a “per member” levy and a second levy which relates to a scheme’s solvency position.
- Reducing mandatory indexation from 5% to 2.5%.
- A requirement on solvent employers which choose to wind up their pension schemes to meet their pension promise in full. This will be retrospective from June 11.
- Replacing the minimum funding requirement with scheme-specific funding arrangements.
- Setting up a new pensions regulator which will concentrate on rooting out fraud and bad practice.
- Revising the priority order which applies on wind-up to ensure the fairest possible sharing of assets between pensioners and current/deferred members.
- Extending TUPE rules to cover pension schemes for workers in the private sector.
- Reduction of the maximum vesting period in pension schemes from two years to three months.
- A requirement for employers to consult workers before making changes to pension schemes to ensure they are developed in partnership with the workforce.
- Increasing the flexibility for schemes to rationalise the structure of their benefits by massively overhauling section 67 of the Pensions Act.
- Simplifying contracting-out – including changes to the administration of guaranteed minimum pensions.
- Removing the requirement to provide facilities for Additional Voluntary Contributions.
- Extending combined pension forecasting across the private pensions industry.
- Raising the normal pension age for public service pension schemes from 60 to 65.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers