Submitted by
Sestini & Co | on Tue, 12/17/2019 - 9:44 | In
Pensions,
Tax planning and pensions The Pension
Schemes Bill was announced in the Queen’s speech in October 2019, at last
kickstarting the process to bring into law some key areas which have been on
the table for a number of years, including:
- A framework for collective defined
contribution (CDC) schemes, which work by sharing risks between members as
opposed to one person taking on the risk as with previous schemes
- Strengthening The Pensions Regulator (TRP)
with new powers to impose penalties of up to seven years in jail and a fine of
up to a £1 million, as well as making it a requirement of trustees to produce a
statement on their funding strategy of the defined benefit (DB) scheme (where
the employer takes on the risk)
- The Bill also sets out the framework for a Pensions Dashboard, including the requirement
for pension schemes to provide accurate information to consumers.
The first reading took place in the House of Lords on 15 October
2019 with the date for the second reading, where debate will take place, not
yet scheduled.
Pensions Dashboard
The suggested new rules for pension schemes set out what
information should be provided to the Pensions
Dashboard, how and when. The goal is to ensure that people throughout
the UK have easy access to information about their pensions, who manages them,
and what they are worth.
The Pensions Dashboard will be set up to provide
information on pension pots that match a person’s details, to include details
such as the most recent valuation and when it was made.
A prototype is already in the works as the government tasked the Association of British
Insurers with producing one back in 2017. It should be available this year,
making pension information more uniformly available to everyone.
Collective defined contribution schemes
But the biggest change addresses collective
defined contribution schemes. Not to be confused with defined benefit pension
schemes, CDC schemes will not guarantee a certain income in retirement but
rather have a target amount, sometimes known as a “defined ambition” that they
will pay out, based on a longer-term investment plan. Another difference is
that savings are invested in a larger collective pot which provides an income
during someone’s retirement.
Given the recent general election, the Pensions Bill has for now
taken a back seat and may continue to do so as issues relating to Brexit will
have to be the main focus for the short term.
However, it’s felt that the Pensions Bill will continue to
progress as there appears to be cross party support for it.
The Pensions Bill introduces statutory obligations on trustees of
occupational pension schemes to provide pensions-related information to any
qualifying pensions dashboard service and here at Sestini & Co Pension
Trustees, we already have measures in place as SSAS trustees to prevent anyone getting tripped
up by the current and new rules.
How we can
help
Sestini & Co Pension Trustees Ltd provide bespoke pension
administration services to support business owners who want to take control of
their retirement savings and align them with the needs of the business.
Whilst a professional Trustee cannot provide financial advice, we
will work alongside a wealth manager to provide a seamless service tailored to
your needs.
With our combined pension and taxation expertise we are ideally
placed to support the bespoke pension needs of business owners by bringing our
experience and foresight to bear to provide a flexible SSAS pension for your
business.
If you would like to discuss your options in
relation to a SSAS, call us on 01761 241 861 or email us today. We will be pleased to advise you or to invite you into our
offices in Paulton, near Bristol and Bath, for a consultation.
