The new Pensions Bill, published on 5 December 2007, proposes several significant changes, including:
- a reduction in the LPI cap applying to the revaluation of deferred pensions for future accrued rights from 5 per cent to 2.5 per cent;
- measures to simplify pension sharing on divorce or dissolution of civil partnership by removing safeguarded rights. Safeguarded rights are that part of a pension credit following a pension sharing order which is attributable to the member’s contracted-out benefits; and
- measures to permit sharing of PPF compensation on divorce or dissolution of civil partnership.
It also provides more information on the establishment of personal accounts, in particular:
- the personal accounts scheme will be a registered occupational pension scheme, targeted at moderate to low income jobholders who do not have access to a workplace pension scheme at present;
- employers will have a duty to enrol a jobholder automatically into, and make contributions to, a personal account scheme unless the jobholder is already a member of the employer’s qualifying workplace pension scheme;
- the Personal Accounts Delivery Authority will be granted broader powers to establish and implement the personal accounts scheme; and
- TPR will be given a new statutory objective to monitor compliance with the new regime and to ensure employers comply with their new duties.
The Pensions Bill, after the Pensions Act 2007, is the second bundle of reforms to the UK pensions system set out in the May 2006 Pensions White Paper, “Security in retirement: towards a new pension system”.
View the Pensions Bill