HMRC announced the following proposed regulations on its website on 12 December 2006.
Future increases to the Lifetime Allowance and the Annual Allowance
HMRC will make a Treasury Order in 2007 to increase the Lifetime Allowance and the Annual Allowance as follows:
**SEE TABLE ON PDF**
Information Requirements for Deferred Annuity Contracts
HMRC intend to publish for consultation draft regulations to remove the requirement that any deferred annuity contracts set up on or after 6 April 2006 have to notify HMRC of their winding-up unless they have already been put onto the HMRC database.
Transitional protection and transfers
The Government proposes to amend the Transitional Order (SI 2006/573) (Order) dealing with transfers and the reorganisation and winding up of occupational pension schemes. At present, the Order allows individual transfers to annuity contracts (“buy-outs”), consequent on the winding up of a scheme, to be treated as if they were “block transfers”. This preserves within the annuity contract any transitionally protected entitlements to early pension ages or tax-free lump sums worth more than 25 per cent of total rights. It is proposed to extend the terms of the Order so that the protection is also preserved where an existing insurance contract is “assigned” to the individual member.
In addition, it is proposed to amend the provisions of the Order relating to transfers consequent on scheme reorganisations in the period between 10 December 2003 (the date of publication of the pension simplification proposals) and A-Day. These amendments will extend the protection of early pension age entitlements, so as to cover deferred members whose rights were not wholly transferred in a single transaction because of the effect of contracting-out legislation, or whose former employer had no involvement with the scheme to which they were transferred.
Modification of rules of existing schemes
The Government also proposes to lay a new Order that will allow the rules of those occupational pension schemes which can only be amended with the approval of HMRC to be amended without any such approval.
HMRC intend to publish for consultation draft regulations which will prescribe how a scheme may calculate a different rate of reduction to a bridging pension where the employment of the member has been partly contracted-out. These regulations will be designed to ease the administrative burdens on schemes.