Resolution said every increase in deficit payments equivalent to 10% of a company's total wage bill fed through into an average reduction in hourly pay for its employees of roughly 1%. In turn, this meant that around 10% of the £19bn rise could be directly associated with lower hourly pay. The average annual impact on workers in companies with DB scheme deficits was between £145 and £225. Although there was a stronger negative effect on employees who remained active members of a DB scheme, there was also a significant impact on lowest-paid workers.
Resolution said the “current scale of deficits and the tendency of longevity to surprise on the upside” meant that there was likely to be a continued impact on pay for the foreseeable future.
There are around 6,000 DB schemes in the UK but 85% are closed to new members and 35% are closed to future accruals. About 40% of DB members are already retired.
DB schemes promise a set level of pension once an employee reaches retirement age, no matter what happens to the stock market or the value of the pension investment, in contrast to defined contribution schemes where payouts are determined by the amount of contributions paid in and their investment performance.
Further details can be found on Pinsent Mason’s website.
Back to Contents
Pension schemes newsletter 87 - May 17 2 June 2017
HMRC’s latest pension schemes newsletter includes a reminder for those operating relief at source to submit their annual return of individual information by 5 July 2017.
The newsletter is published by HMRC’s Pension Schemes Services to update stakeholders on the latest news for pension schemes. The following topics are covered in the Pension schemes newsletter 87 :
Pension advice allowance Relief at source Scottish rate of Income Tax The pension scheme return and the SA970 tax return for trustees of registered pension schemes Changes to the scheduled publication of the Recognised Overseas Pension schemes (ROPS) notification list
Back to Contents
Guaranteed Minimum Pension checker – issue resolved 5 June 2017
On 15 May HMRC reported an issue with bulk uploading on the Guaranteed Minimum Pension (GMP) checker. This has now been resolved.
This message was published on the Guaranteed Minimum Pension checker: service availability and issues page.
Back to Contents
3 percent today for 24 percent in retirement 12 June 2017
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
Page 436 of 516
Made with FlippingBook - Online magazine maker