Atkin trustees, actuaries, consultants & administrators

Current Issues - April 2016

Happy New Tax Year!: The Lifetime Allowance is now £1million and the annual allowance will now taper down from £40,000 to as low as £10,000 for individuals with income of £150,000 or more. Schemes will need to provide Pension Saving Statements, automatically, to any member whose savings within the scheme exceed the annual allowance for the tax year in question.

Cessation of contracting out: Trustees will need to pass a resolution by 6 April 2017 to have the power to amend their fixed-rate revaluation rules as necessary to comply with legislation. There will be no need for prior consultation by employers. Schemes that met auto-enrolment requirements due to contracting out will need to certify that they still satisfy the relevant minimum quality requirement. In order to do so they will need to check that they provide benefits that are broadly equivalent to, or better than, the benefits the test scheme would provide.

The key features of the test scheme include:

• entitlement to a pension from age 65, gradually increasing to 68 (to reflect increases in state pension age) and continuing for life

• an annual pension of 1/120th of average qualifying earnings in the three tax years before the end of pensionable service, multiplied by the number of years of pensionable service, up to a maximum of 40

• revaluation of accrued benefits by a specified method

• annual increases in payment of at least the increase in the CPI capped at either 5% or 2.5%, depending on periods of pensionable service

The comparison will usually be done by the Scheme Actuary, although in some circumstances, the employer may self-certify, providing no actuarial calculations or comparisons are required.

More information can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/307074/auto-enrol-guid-emp.pdf

2016 Valuations – A rough ride ahead?: With Gilt yields down from their April 2013 levels, pension scheme’s undergoing a valuation as at April 2016 may be faced with an unwelcome fall in their funding levels. Future inflation expectations and ‘better than expected’ investment returns may help to dampen the effects to some extent but many schemes are unlikely to have seen an improvement since 2013.

Atkin & Co is awarded the Quality Assurance accreditation by the Institute and Faculty of Actuaries (IFoA).

 

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We used Atkin Trustees as part of a wind up of our scheme. With the help and support of Richard Bryant we were able to move forward a process that had become stalled - his expert guidance was invaluable to me and the other Trustee involved. The whole process was handled in a practical and timely manner, and I felt at last we had access to expert Trustee experience and knowledge to guide us through the many obstacles that we faced. It was a pleasure working with Richard.

Len, Independent Trustee client