The CA series of forms have been available on the HMRC website for the last year to allow time for any late notifications to be submitted, following the abolition of contracting out on a defined contribution basis from 6 April 2012. These forms will be removed from HMRC website on 1 April 2013 so if you are yet to make arrangements to secure protected rights and have not yet notified HMRC of these arrangements you should do so as soon possible.
TPR OBJECTIVE WILL ALLOW EMPLOYERS TO CUT CONTRIBUTIONS
22 March 2013
The Pensions Regulator’s new objective to consider employers’ growth prospects is expected to allow struggling companies to cut back on contributions.
Reports Professional Pensions
Chancellor George Osborne announced in the Budget this week that TPR would be equipped with a fresh objective to consider the sustainable growth of employers, in a bid to free-up private sector investment that is being channelled into pension deficits.
Experts believe the move will ease funding pressure on sponsoring employers with defined benefit schemes by giving them a stronger hand in negotiations with trustees.
But some commentators have raised concerns that this will make TPR's other objectives to protect members and the Pension Protection Fund more precarious.
Broadstone actuarial director John Broome Saunders said the move marked "a clear shift in the balance of power".
He said: "The majority of DB scheme sponsors will want to argue that sustainable growth requires greater investment in their business, and thus lower contributions to fund pension deficits.
"Larger deficits mean less security for members, and a heightened chance that schemes end up cutting benefits and being dumped in the PPF."
Hargreaves Lansdowne head of pensions research Tom McPhail argued there is a danger the approach will merely "kick the funding problem down the road".
McPhail said: "There isn't enough money in the pension system to pay all the promised benefits and there probably never will be. Some scheme members will have to take a cut in their benefits, the only question is how evenly the pain gets shared out." Towers Watson senior consultant Adam Boyes said the change could impact how funding agreements between employers and trustees are policed - but he added the Budget had not given companies a "green light" to reduce contributions.
Others have welcomed the move, arguing a strong sponsoring employer is more important for a pension scheme in the long term.
Lobby groups the National Association of Pension Funds and the Confederation of British Industry both welcomed the decision.
PwC pensions partner Jeremy May said the move would help ensure employers are not met with "unmanageable" funding obligations.
CIPP Policy News Journal
16/04/2014, Page 415 of 519
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