Posted on
5th July 2011 by
Laura Cumming
I recently had a need to review the Regulator’s Guidance on Incentive Exercises which was updated in December 2010. While on the face of it the principles are not too different to the original guidance I thought it worth re-iterating a few of the main points.
An Incentive Exercise (formerly known as an Inducement Exercise) is where an offer is made by an employer to a Defined Benefit scheme’s members to transfer out or amend benefits, usually in return for some form of financial incentive, with the intention of reducing liabilities or risk in the scheme.
These exercises remain a viable starting point for any company tackling the funding levels of a Defined Benefit (DB) scheme and, as long as they are dealt with in accordance with the Regulators guidance and with the input of the Scheme’s Trustees, offer an attractive alternative to many members if pitched at the right level.
The Pensions Regulator tells Trustees Read more »
Posted in: Blog
Tags: Pension Funding, Pensions Regulator, Transfer Incentives, Transfer Values
Posted on
30th November 2009 by
Laura Cumming
I read with interest that trustees should not get involved in Enhanced Transfer Value exercises (ETVs). I would agree that it should not be the position of the trustee to question the reason for such an exercise (is there a reason other than de-risking?) however, I am in full support of trustees reviewing communications to members to ensure that the guidance from the Pensions Regulator has been followed and that the offer is fully explained to members with the necessary notes of caution included.
Without trustee review the ETV runs the risk of being overturned at a later date with consequent additional cost to review and ‘fix’ any problems.
Of course if a trustee does not have an opportunity to review the ETV offer a trustee could elect to send its own communication to members but quite frankly this could do nothing other than confuse an already complicated matter.
See UPDATE on ETVs reflecting the July 2010 Guidance.
Posted in: Blog
Tags: Liability Reshaping, Trusteeship
Posted on
22nd October 2009 by
Laura Cumming
Another change in administration procedures coming up soon!
Earlier in the year the Registered Pension Schemes (Authorised Payments) Regulations 2009 came into force, forgiving the tax penalty on certain payments which were previously deemed unauthorised, e.g. payments made in error and payments of arrears of pension due after the death of a member.
From 1 December 2009 these regulations allow occupational pension schemes to commute trivial pensions, in certain circumstances, without any reference to the benefits a member may have in other unrelated pension schemes or contracts. This will be limited to pensions with a capital value of less than £2,000. The usual taxation procedures will apply.
Unfortunately these regulations do not apply to individual insured arrangements so sadly another blow to the ‘one size fits all’ regime affectionately known as Pensions Simplification!
Posted in: Blog
Tags: Administration, Legislation
Posted on
17th July 2009 by
Laura Cumming
The Press has recently been full of reports about the working population having the freedom to work past 65 with a removal of compulsory retirement ages in the workplace. Strangely, everyone I speak to in their 40s and 50s is afraid that such a move will see them coerced into continuing to work “just for a few years more” Read more »
Posted in: Blog
Tags: Pensions, Retirement
