Policy News Journal - 2012-13

Pension liberation, also known as ‘pension loans’ and ‘pension scams’, is the transfer of a member's pension savings to an arrangement that will allow them to access their funds before they are entitled to receive them. This activity can be fraudulent where members are not informed, or are misled, about the consequences of these schemes. The Regulator calls this type of activity ‘pension liberation fraud’ and members who agree to it could face a tax bill of more than half the value of their pension savings. In some cases these arrangements appear to operate within the letter of the law, but they can still attract large tax charges and further penalties. Some are outright illegal. Most of the time, people targeted by these scams are not informed of potential tax consequences. Only in rare cases, such as terminal illness, can members take a pension before age 55. If you are associated to a pension scheme, then you may be able to help prevent members from becoming victims of this fraud. To help you, The Pensions Regulator and other agencies have produced information about the threat of these offers:  a warning insert for administrators and pension providers to include in the information they provide to members requesting a transfer  a detailed information leaflet for members who want to understand the consequences of these offers  An action pack for pension professionals, including a checklist and examples of what to look out for.

DRAFT TRANSFER OF EMPLOYMENT (PENSION PROTECTION) (AMENDMENT) REGULATIONS 2013 - CONSULTATION

26 February 2013

The DWP have launched a consultation that is seeking views on the Draft Transfer of Employment (Pension Protection) (Amendment) Regulations 2013.

The consultation will run from 25 February to 5 April 2013 is aimed at pension scheme trustees, their advisers and employers who sponsor workplace pension schemes.

Part 1 sees the government looking to clarify the original policy intention of the Transfer of Employment (Pension Protection) Regulations 2005 and confirm the employee’s right to choose the level of their own contribution (subject to any minima in the scheme rules) which must be matched by the employer up to a maximum of 6 percent. Part 2 sees the government proposal that transferee employers will be able to satisfy the ‘relevant contributions’ provisions of the 2005 Regulations by matching the contributions paid by the transferor immediately prior to the transfer as an alternative to matching the level of contributions chosen by the employee. It would be for the transferee to decide how they will meet their pension protection obligations.

THE OCCUPATIONAL AND PERSONAL PENSION SCHEMES (DISCLOSURE OF INFORMATION) REGULATIONS 2013 - DWP CONSULTATION

21 February 2013

The Department for Work & Pensions has launched a consultation which is asking for views on draft regulations, which propose consolidation and harmonisation of the principal disclosure of information regulations for occupational and personal pension schemes.

CIPP Policy News Journal

12/04/2013, Page 277 of 362

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