Latest news 2011
Workplace Pension Reform: consultation on automatic enrolment thresholds: review and revision 2012 / 2013
15 December 2011
Today the Government published the consultation on automatic enrolment earnings thresholds: review and revision 2012 / 2013 to inform how these amounts should be updated for the first year of automatic enrolment live running.
The Pensions Act 2011 provides a flexible power to review the automatic enrolment earnings trigger and the lower and upper limits of the qualifying earnings band each tax year. The breadth of the power allows us to ensure that automatic enrolment continues to target the right group of individuals while carefully weighing the cost to business and the impact on the pension industry.
This consultation sets out our approach and proposals for the first annual review of the figures. It presents an assessment of relevant factors for each of the thresholds, sets out our thinking behind those assessments, the calculation methods we have considered using, and the evidence on which our proposals are based.
The Government announce that State Pension age will increase to 67 by 2028
29 November 2011
In his Autumn Statement, the Chancellor announced that State Pension age will now increase to 67 between 2026 and 2028. This decision was taken in the light of increasing life expectancy and will help keep the cost of state pensions sustainable.
These proposals will mean that people born after 5 April 1961 but before 6 April 1969 will have a State Pension age of 67 and people born after 5 April 1960 but before 6 April 1961 will have a State Pension age between 66 and 67.
This change to the timetable is not yet law and will be subject to Parliamentary scrutiny when legislation is introduced. We will publish more details when they are available.
Changes to the automatic enrolment timetable
28 November 2011
The Government has confirmed that automatic enrolment will begin on time in Autumn 2012 and that all employers will remain in scope.
Small businesses will be given additional time to prepare for the implementation of automatic enrolment. No employer with an existing staging date on or before 1 July 2013 is affected; they will go ahead as planned.
We will publish a detailed staging profile for all employers in January.
- Press release – Government announces changes for small business to the automatic enrolment timetable
The Pensions Act 2011 – supporting documents
21 November 2011
On 21 November we updated a number of the supporting documents for the Pensions Bill 2011 to reflect the Pensions Act 2011 when it received Royal Assent. The update documents included the impacts assessment for:
- State Pension age
- workplace pension reform
- other Pensions Act measures
- Pensions Act 2011 – supporting documents
The Pensions Act 2011
9 November 2011
The Pensions Bill 2011 received Royal Assent on 3 November 2011.
The Act puts into law changes to the State Pension age timetable. From April 2016, women's State Pension age will rise faster than originally planned, equalising with men's at 65 by November 2018. Between December 2018 and October 2020, men and women's State Pension ages will be increased from 65 to 66. The Act also:
- implements workplace pension reform measures from the Making Automatic Enrolment Work Review; and
- allows contributions to be taken towards the cost of providing personal pension benefits to current judicial pensions scheme members.
- State Pension age timetable (78KB)
Occupational pension schemes: definition of money purchase benefits
27 July 2011
On 27 July 2011 the Supreme Court handed down judgment in “Bridge Trustees Ltd vs Houldsworth and another”. This case deals with the meaning of money purchase benefits in pensions law. The then Secretary of State intervened in the case given its significance. The Supreme Court decided two issues in the appeal. In particular, the Court ruled that:
- even where benefits were subject to a guarantee in the build-up phase, they should be considered to be money purchase benefits; and
- where schemes used money purchase rights to provide pensions from the scheme itself, rather than to purchase annuities from an insurer, the pensions should be considered to be ‘money purchase’ pensions.
This is a complex and important decision, and we are considering the implications carefully. It is clear, however, that the judgment will result in some schemes being regarded as providing money purchase benefits under the current legislation, even if it is possible for funding deficits to arise in respect of those benefits. This will place some schemes outside the scope of a wide range of legislation, including legislation governing:
- scheme funding,
- employer debt,
- the Pension Protection Fund and,
- the Financial Assistance Scheme.
It also introduces uncertainty about how the trustees of some schemes should distribute its assets if the scheme were to wind up. This increases the likelihood that they would need to seek directions from the Court – an expensive and time consuming process.
The Government therefore intends to introduce legislation as soon as is practicable in order to:
- provide certainty, and
- ensure:
- appropriate protection for scheme members’ benefits, and
- compliance with our obligations under European law.
Workers who up to now thought their rights were protected have been put in doubt by this ruling of the Supreme Court. In the circumstances, the Government intends to ensure these rights are clarified through retrospective legislation.
Our intention is that the legislation will have retrospective effect at least from the date of the judgment. The legislation will make it clear that benefits cannot be regarded as money purchase benefits if it is possible for a funding deficit to arise in respect of any of those benefits. The Government will consider transitional protection in respect of events occurring between the date from which the legislation is effective and the date of this statement if, for example, this retrospective change would have adverse consequences for individuals.
This will ensure that the legal definition of money purchase benefits has the meaning that it has commonly been believed to hold. The Government considers that this course of action will better help ensure appropriate protection for pension scheme members.
Workplace pension reform: publication of information research and language guide
13 July 2011
Today we are publishing research we carried out to inform the way we deliver information on workplace pension reform to members of the public.
From October 2012 all employers will have to enrol eligible workers into workplace pension schemes. This change seeks to encourage increased pension saving among workers.
We know that many people are daunted by pensions and sometimes the language used is complex and puts people off. The research has provided seven key principles which will shape our approach to the information we provide for individuals.
Working with partners, we have used this and other pieces of research to develop our “Automatic enrolment and pensions language guide”, which we will use to simplify our communications in the run up to October 2012. We hope our guide will also influence the language used by our partners and the wider pensions industry. We intend to update and add to the language guide.
If you have any comments please send them to: pensionslanguage@dwp.gsi.gov.uk
Regulatory differences between occupational and workplace personal pensions: Call for evidence to prepare for automatic enrolment
27 June 2011
The Government published today its initial response to the call for evidence on regulatory differences between occupational and workplace personal pension schemes.
We received a number of responses from a variety of organisations and individuals, and are grateful to all those who responded.
We will undertake further analysis which builds on the call for evidence, in order to publish a more detailed follow-up paper in the Autumn. In this paper we will outline how we intend to change short service refunds, together with potential ways to mange the burden of small pension pots after automatic enrolment.
Guidance for offering a default option for defined contribution automatic enrolment pension schemes
24 May 2011
Today we are publishing new guidance to help those involved in offering a default investment option for people who are automatically enrolled into defined contribution pension schemes. We are also publishing the Government’s response to the consultation today.
The pensions landscape is changing. Automatic enrolment into workplace pensions will see millions of individuals newly saving for their retirement. Many of these people will not choose to make an active investment choice. It is likely that, from 2012, automatic enrolment into default options will be the norm. Therefore, it is important that suitable default options are available. So it is essential that this option is sound and suitable for members.
The guidance sets out our expectations on how default options should be designed, governed, communicated and reviewed. We intend it to provide useful information that will support good decision making and help protect members’ interests.
The guidance has been developed with extensive input from stakeholders and we thank them for their time and expertise.
- Guidance for offering a default option for defined contribution automatic enrolment pension schemes
- Offering a default option for defined contribution automatic enrolment pension schemes – Government response on the consultation on draft guidance
A State Pension for the 21st century – public consultation
4 April 2011
We are seeking views on the Government’s proposals for simplifying the State Pension system. It includes two options:
- to speed up the transition to a two tier flat rate pension; or
- to create a single tier flat rate pension above the Pension Credit standard minimum guarantee.
We are also consulting on the most appropriate mechanism for determining future changes to State Pension age.
We would like to hear from everyone who is interested in the simplification of the State Pension. We particularly welcome contributions from:
- representative organisations and business
- employers with Defined Benefit pension schemes
- pension administrators and trustees
- members of the public.
- A State Pension for the 21st century
Regulatory differences between occupational and workplace personal pensions: Call for evidence to prepare for automatic enrolment
31 January 2011
We would welcome comments as part of a call for evidence on regulatory differences between occupational and workplace personal pension schemes.
The Government is committed to ensuring that the legislative framework governing pensions remains appropriate in light of automatic enrolment. The Department is also interested in views on potential solutions to address any problems created by regulatory differences. Any solutions will be judged against the benefits to individuals, and the potential burden on schemes and employers and the Government’s de-regulatory agenda.
Please send any views by no later than 18 April 2011.
