In last month’s update, it was noted that the DWP had published the Government’s response to the consultation conducted on the Occupational Pension Schemes (Contracting-out) (Amendment) Regulations 2009 (the Regulations). These Regulations have now been laid before Parliament and are due to come into force on 6 April 2009 at the same time as section 14 of the Pensions Act 2007 (Conversion of guaranteed minimum pensions). Together, these provisions will implement a new regime for converting GMPs into ordinary scheme benefits of actuarial equivalence.
Two minor changes have been made to the Regulations since they appeared in draft form:
- instead of requiring trustees to obtain advice from the actuary about what assumptions “should be used”, the advice should be as to what assumptions “are appropriate at the conversion date”, which simply clarifies that the assumptions are being set for a future event; and
- there is express provision for the trustees to change their decision about the assumptions if they “later think it necessary”. This emphasises that trustees are free to re-visit their decision if, for example, financial conditions have changed in the period since the assumptions were originally set.
Our March 2009 briefing paper provides further detail on the subject of GMP conversion.
View the regulations.