The Pensions Bill received Royal Assent on May 14, 2014, to become the Pensions Act 2014. The Act introduces legislation in relation to several areas including:
- State pension changes – the single-tier pension will be introduced for those who reach the state pension age on or after April 6, 2016. The state pension age will rise from 66 to 67 between 2026 and 2028 (eight years earlier than originally planned).
- Automatic transfers - introduces the framework to enable the Government’s ‘pot follows member’ proposals.
- Short service refunds – refunds of employee contributions from an occupational pension scheme will only be permitted if an employee leaves within 30 days of joining the scheme. The date from when the change applies is to be confirmed.
- Incentive exercises – a power is introduced to prohibit offering incentives to transfer pension rights.
- Automatic enrolment – revisions to address technical issues in relation to auto-enrolment.
- PPF compensation cap – measures to restructure PPF compensation so that a higher cap applies to those with long service.
- Pensions Regulator objective - the new Regulator objective ‘to minimise any adverse impact on the sustainable growth of an employer’.
Further information on the Act can be found here.