Atkin trustees, actuaries, consultants & administrators

Current Issues - July 2015

2015 Summer Budget: Given the sweeping changes we have seen in recent Budgets, there had been some concerns that upfront pension contributions tax relief would be abolished by the Chancellor. Instead, this will be the subject of a significant pensions industry consultation process. We will keep you updated as to developments and would encourage all those with an interest to get involved. At the same time, scheme administrators will need to allow for the changes to the Annual Allowance for high earners and the alignment of pensions input periods to correspond with the tax year (and the impact that this has on the annual allowance for the current year).

Proposed changes to the IAS accounting standards: The proposed IFRIC 14 amendment on availability of refunds could remove any IAS 19 surplus currently disclosed, with a potential need instead to recognise an additional liability if an a recovery plan is in place. Where you have a recognised IAS19 surplus, you may want to check your scheme rules to see if the Trustees have unilateral powers to enhance member’s benefits or wind up the scheme and impose a s75 debt. If these do apply, sponsors may want to review whether these powers might be weakened in return for additional security/contributions.

There are also proposed amendments to IAS19 where, even minor curtailments or settlements, would require a full re-measurement of the scheme at the date of the change in order to re-calibrate P&L items projected from that date).

These are only proposed changes and the consultation period ends in October 2015.

DC/DB Hybrid Schemes: Pension schemes that provide Trust based DC benefits (pure DC or DB/DC hybrids) must have a Chair of Trustees in place by 5 July 2015 who will need to produce an annual statement that covers governance activities and confirms how the trustees have complied with the new codes of practice for DC schemes. This will need to must be included in the trustees’ report and accounts for scheme years ending on or after 6 July 2015.

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I have worked on a number of schemes with Atkin Trustees Limited and with Richard Bryant in particular. I found them to be a very organised team who focus on achieving practical and cost efficient solutions.

Michael M Jones, Partner, Charles Russell LLP