UK - The Inland Revenue is struggling to find ways of closing a loophole in its plans to simplify trivial commutation, an expert claims.
Trivial commutation allows people with a pension pot of less than £15,000 to take the money as a lump sum rather than receive annual payments. But there is nothing to prevent individuals opening multiple plans just under the limit to gain the tax benefits.
Clerical Medical head of industry affairs Nigel Manners said: “We called for the Revenue to give us some answers but it didn’t tell us one way or the other – and it is because it does not know how it will stop people abusing the system.”
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.