UK - Parts of the Pensions Bill may be delayed by a year to bring it in line with the new date for tax simplification, experts fear.
They believe Chancellor Gordon Brown’s decision to put back pension tax simplification until April 2006 could also affect the appointment of the new pensions regulator and the introduction of scheme-specific funding in place of the minimum funding requirement.
But they are confident the Pensions Protection Fund will still be introduced in April next year and warn the government risks “political suicide” if it fails to do so.
Mercer Human Resource Consulting worldwide partner Peter Thompson said: “Several changes might get deferred by another year. It is fair that people are concerned because then you have got to start looking at it in parts.”
He added that any delay to the Bill would discourage pension saving. “It creates more uncertainty for schemes. There is no encouragement now to keep providing schemes or to save for retirement, so this will certainly not help.”
Eversheds partner Giles Orton agreed. “The department for work and pensions could well go the same way. It has already conceded the timescale will be tight for employers. This means many will have to keep going under the old arrangements.
There is little in the Bill that will not benefit from another year’s thinking time to make sure it’s right.”
Pensions Management Institute president Roger Cobley welcomed the delay to A-Day: “We are delighted the government has decided to introduce tax simplification in 2006 – 2005 was too tight a time schedule when the regulations are yet to be published.
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
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