On 3 November, the Pensions Bill received Royal Assent and became the Pensions Act 2011. The Act implements several important changes, including equalising and increasing the State Pension Age for men and women, the switch from RPI to CPI as the measure of inflation for revaluing deferred pensions and increasing pensions in payment, changes to the auto-enrolment regime and changes to the definition of "money purchase benefits".

State Pension Age

The State Pension Age will be increased for both men and women to 66 by 2020.  The most recent amendments to the Bill in relation to the state pension age changes were made on 19 October.  The Government  amended the Bill so as to delay the timetable for the increase by six months; state pension age will now increase to 66 in October 2020, rather than, as provided for previously, in April 2020.

Switch from RPI to CPI

The Act will permit schemes to switch from using RPI to CPI as the inflation measure for revaluing deferred pensions and increasing pensions in payment.


The key changes to the auto-enrolment regime were introduced under the Pensions Bill before Parliament's summer recess.  For our e-briefing on those changes, click here.  A number of minor changes have been introduced since Parliament's return from the summer recess.  These include a provision in relation to the cap on administrative charges incurred under a qualifying pension scheme - for more about this amendment, click here.

Definition of 'money purchase benefits'

Following the Supreme Court's decision in Houldsworth v Bridge Trustees,  the Act amends the definition of "money purchase benefits" in pensions legislation. The definition has been changed to the effect that "money purchase benefits" only includes those benefits in respect of which a funding deficit cannot arise. The Act also allows for transitional provisions, supplemental changes and further changes to the definition to be made by regulations.  To see our earlier e-alert on these changes, click here.

Pensions Regulator's anti-avoidance powers

The Act makes amendments in relation to the 'look-back' periods for a financial support direction (FSD) and a contribution notice (CN) so that those periods will end with the Regulator giving a warning notice of its intention to issue an FSD or CN, instead of ending with the date of the determination to issue a CN or FSD.  This additional timing would give the Regulator more time to formulate its case and gather evidence.  A power is also included for regulations to be made to set a time period within which a CN or FSD may be issued, starting with the day on which the warning notice is given.  The effective date of these changes is to be determined by an order of the Secretary of State.