Of interest to all salary-related contracted-out schemes is the DWP’s update on the delayed publication of the regulations providing the statutory override to offset increased scheme costs, which have been awaited since Autumn 2014.
HMRC is also holding conferences on the GMP reconciliation service in Newcastle on 30 April 2015 and in London on 7 May 2015.
As a result of the introduction of the new single-tier State pension, contracting-out for defined benefit (DB) schemes will come to an end on 5 April 2016. This means that national insurance contributions (NICs) will increase for both employers and employees. Two sets of regulations are expected:
- the statutory override - the draft Occupational Pension Schemes (Power to amend schemes to reflect abolition of contracting-out) Regulations 2014 will be published “shortly” so that they come into force before the end of this Parliament on 30 March 2015. These regulations set out a statutory override enabling employers to amend scheme rules, without trustee approval, to reduce scheme costs in order to offset the increase in NICs when contracting-out ends (see also our legislation update below); and
- post-abolition rules – the draft Occupational Pension Schemes (Schemes that were contracted-out) Regulations 2014 set out the rules with which schemes must comply following the abolition of DB contracting-out in April 2016 and will not now be published until after the General Election on 7 May 2015.
HMRC’s Countdown Bulletin no. 5 also includes:
- a reminder about the availability of the Scheme Reconciliation Service; and
- notification of a new online facility from April 2016 allowing schemes to request GMP calculations on an individual member basis or to make bulk requests.
View the Countdown Bulletin no. 5.
Countdown bulletin no. 6 provides details of two pension conferences to be held by HMRC on the Scheme Reconciliation Service for GMPs. The first is in Newcastle on 30 April 2015, the second is in London on 7 May 2015.
For further details, see Countdown Bulletin No. 6.