Work to finalise the revised draft continues but it is understood that current uncertainty in the sector about the tax treatment of ‘underfunded’ bulk transfers for Annual Allowance purposes is causing difficulty, particularly for those registered pension schemes seeking to merge where member benefits will be unchanged after the transfer. Ahead of the publication of the revised draft Order, it may be helpful to confirm that it is the Government’s intention that pension input amounts should not arise in situations where all of the following criteria are met; There is a ‘bulk’ or ‘block’ transfer of a group of members from one registered pension schemes to another as a result of an employer rearranging its pension schemes or as part of a business transaction The member's retirement benefit in the receiving scheme represented by the transfer is the same in principle as if it had remained in the original scheme and the rearrangement of pension schemes or business transaction had not taken place i.e. a transfer on a mirror image basis. This requirement may be expressed using a value test to ensure that some variations in benefit format can be accommodated, however this is still being finalised and further detail will be provided by the draft Order on publication. The pension input amount would at present arise simply because the transfer is ‘underfunded’ (that is, the sums or assets transferred to the receiving scheme are not sufficient to support the level of benefits promised by the receiving scheme). The draft Order to be published will include revised provisions to address this ‘underfunded bulk transfer’ issue and it is intended that the provisions will have effect for pension input amount calculations for 2011/12 and subsequent tax years. The Government will consult further on the revised draft Order, including these provisions, and the final draft will require parliamentary scrutiny. It is therefore possible that further changes may be required.
Any queries should be routed to pensions.policy@hmrc.gsi.gov.uk
HMRC PENSIONS INDUSTRY BUSINESS UPDATE – ISSUE 6
24 July 2013
Issue 6 of the Pensions Industry Business update has been published.
Amongst other topics of interest, Issue 6 of the Pensions Industry Business Update, which was previously known as the National Insurance Services to Pensions Industry News Letter, contains an article explaining the importance of the SCON reference and why it is to become a mandatory requirement on the Full Payment Submission (FPS) as from April 2014. Additionally and as a result of an upgrade to the telephone system contact telephone number have changed recently, previous numbers that you may have recorded should be replaced in your contacts.
Personal Pensions Sections 1-3 (PP): 03000 553617 - Dealing with PP scheme members prior to State Pension Age
Personal Pensions Section 4 (PP4): 03000 574171 - Dealing with retired and deceased members in PP and COMP schemes including members in receipt of Protected Rights
Contracted-out Money Purchase (COMP): 03000 553618 - Dealing with COMP Scheme members prior to State Pension Age
CIPP Policy News Journal
16/04/2014, Page 431 of 519
Made with FlippingBook - Online magazine maker