Professional November 2017

Pensions news

Pension news

NOW: Pensions to top up pension pots WORKPLACE PENSION provider NOW: Pensions has announced that for the 2016/17 tax year it will again make up the income tax relief shortfall for members of its scheme who are not taxpayers – typically those earning less than £11,000 – and are currently missing out on the tax relief that they would receive in a relief-at-source (RAS) scheme. NOW: Pensions is the only net-pay scheme (i.e. one providing tax relief through the ‘payroll’) to offer a top up to its membership. Information about the top up will be included within members’ 2016/17 benefit statements and communicated to employers. Members who do not pay income tax on their earnings will be directed to a short claim form on the NOW: Pensions website and a letter of authority, permitting HM Revenue & Customs (HMRC) to divulge tax details to NOW: Pensions in respect of the 2016/17 tax year. On receipt of the completed claim form and letter of authority from the member, NOW: Pensions will liaise with HMRC and on obtaining confirmation that the members do not pay tax NOW: Pensions will credit members’ pension pots with the income tax relief they would have received in a RAS arrangement. Troy Clutterbuck, interim chief executive officer of NOW: Pensions, said: “While the amounts these savers are currently missing out on is relatively small, around £10 per year for somebody earning £11,000 – as the nil rate tax band rises this amount is going to increase. We continue to talk to the Treasury and HMRC to find a way to resolve this anomaly over the long-term but progress has been disappointingly slow and a solution to this problem remains elusive.” Simple guide explaining GDPR A NEW free Made Simple Guide (http://bit.ly/2xF5PMf) has been launched by the Pensions and Lifetime Savings Association in partnership with Herbert Smith Freehills. The guide, which aims to help pension schemes become fully compliant with the European Union’s General Data Protection Regulation (GDPR) by the deadline of 25 May 2018, provides: ● a glossary of data terms essential to understanding the new regulations ● a suggested timeline for GDPR readiness ● a comprehensive list of steps for trustees to take including key considerations, explanations of the regulatory requirements, and suggested means of implementing them. Alison Brown, global head of employment, pensions and incentives at Herbert Smith Freehills, said: “This Made Simple Guide looks to introduce and guide pension schemes through the vast, and often highly complex, data protection changes that will take effect in May 2018. Our key message to schemes and their trustees is to be thorough, keep an eye on developments (there is a lot still to come) and, given the number of workstreams and necessary involvement of third parties, to make a start as soon as possible.”

Pensions legislation befuddles Brits NEW RESEARCH from online pension adviser Wealth Wizards highlights a significant lack of knowledge about changes to pensions legislation for UK workers. Over seventy per cent of Brits said they thought it was the responsibility of employers to ensure that their employees are informed of changes to pensions legislation and how they are affected on an individual level. Phil Blows, director at Wealth Wizards, said: “The knowledge gap highlighted by this research relating to recent changes is concerning. This is not to say that this lack of knowledge surrounding pensions in general is not understandable. It is after all a complex issue with many moving parts. It does however highlight the need for employers to educate their workforce sooner rather than later to ensure that they are prepared for retirement.” commented that AE “is a huge success story which has seen the number of people who save into a workplace pension increase significantly” adding that the successful introduction of AE “has taken a significant amount of hard work from all parties with government working closely with industry.” Five years of AE AUTOMATIC ENROLMENT (AE) was introduced five years ago on 1 October 2017. The Pensions and Lifetime Savings Association (PLSA) has highlighted how far we have come since: ● 7.6 million more people have been auto-enrolled into workplace pensions ● the proportion of eligible private sector employees who save into a workplace pension increased by more than a third from 42% (2012) to 73% (2016) ● almost three-quarters (74%) of all employers support the policy of AE with this proportion rising to 92% amongst large employers ● significant uplift (37% in 2012 to 71% in 2016) in the proportion of people on the average UK income (i.e. who earn between £20,000 and £30,000) saving into a pension ● £405billion has been saved into workplace pensions, of which, £119billion are employee contributions, £247billion are employer contributions and £39.2billion is tax relief. Graham Vidler, director of external affairs at the PLSA

PASA accreditation framework THE PENSIONS Administration Standards Association (PASA), the independent body dedicated to driving up standards in pensions administration, is expanding its accreditation framework to accommodate master trust and buyout providers. The new standard launched its first pilot in July. PASA accreditation, which is open to all corporate members, is granted following an independent evaluation and assessment process that includes on-site visits and the review of documentation to evidence controls, procedures, process, staff development and contractual positions with clients. Full details can be found by visiting http://bit.ly/2wfgw6t.

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Issue 35 | November 2017

| Professional in Payroll, Pensions and Reward |

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