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retirement
Employer-Financed Retirement Benefits Schemes – New excluded benefits for former members of the armed forces
Friday, September 23rd, 2011New regulations allow certain fees to former members of the armed forces and their family members to be exempt from tax. Section 394 of the Income Tax (Earnings and Pensions) Act 2003 imposes a tax charge on the provision of relevant benefits from an employer-financed retirement benefits scheme (EFRBS). For example, if a retired employee continues to [...]
Statutory default retirement age and related provisions repealed
Friday, April 8th, 2011Amendments to the Equality Act and the Employment Rights Act repeal fair dismissal and lawful age discrimination for employees reaching age 65. In October 2006, provision was made by means of the Employment Equality (Age) Regulations 2006 for a default retirement age (DRA) of 65, which could be relied on by employers, if they wished, [...]
DWP publishes statistical information about older workers
Thursday, January 13th, 2011On 11 January, the Department for Work and Pensions published Older Workers Statistical Information Booklet. Older workers in this context are those aged 50 to 64. The key findings are: There are 21.0 million people aged 50 and over in the UK. Of these 11.2 million are “older workers”, i.e. aged between 50 and 64, [...]
NEST campaign to clarify pension terms and phrases
Thursday, January 13th, 2011The National Employment Savings Trust (NEST) has published the first version of a phrasebook which puts unfamiliar pension terms and expressions into more readily understandable English. For example: “retirement income” is used instead of “annuity”, and it is defined as a “regular income stream for the rest of your life” “opening your retirement pot” is [...]
Phasing out the default retirement age
Thursday, January 13th, 2011As expected, the Department for Business, Innovation and Skills (BIS) confirmed on 13 January that default retirement age (DRA) will be abolished completely in three stages during 2011: from 6 April 2011, employers will not be able to issue any notifications for compulsory retirement using the “DRA procedures” (see below) between 6 April and 1 [...]
Consultation on draft legislation for Finance Bill 2011
Friday, December 17th, 2010The policy of the Coalition government is to confirm most of its new tax measures at least three months before the introduction of a Finance Bill. The draft text of the legislation that will appear in the Finance Bill 2011 was published on 9 December and is open for technical comment until 9 February 2011. [...]
Nest charges announced
Monday, November 29th, 2010The legislation governing the introduction of automatic pension scheme enrolment from 2012 provides for the establishment of a statutory pension scheme that may be used by employers to meet their statutory obligations. The scheme is known as the National Employment Savings Trust, or “NEST” for short. NEST will operate with two charging elements: an annual [...]
Timetable for State Pension age increase to 66 confirmed
Friday, November 12th, 2010Among the announcements by the Chancellor in the Spending Review on 20 October was the decision to bring forward the schedule for increasing the State Pension age for women to 65 and for both men and women to 66. The changes in the timetable from April 2016 onwards have been published on the Directgov website [...]
DWP announces changes to pension personal accounts in order to “make automatic enrolment work”
Thursday, November 4th, 2010On 27 October, the Department for Work and Pensions (DWP) published the detailed results of an independent review of the procedures needed to ensure that automatic enrolment into the new pension personal accounts from October 2012 will work and be effective. Automatic enrolment will be introduced in monthly stages between 2012 and 2016, with the [...]
What non-taxable benefits can be provided for retired employees?
Thursday, September 16th, 2010From 6 April 2006, when an employer provides payments and benefits to employees who are retiring or to the family or relatives of an employee who dies in service but which are not provided from a registered pension scheme (e.g. an occupational pension scheme), the payments and benefits are treated as being provided under an [...]
Additional measures enacted in second Finance Act – June 2010 Budget
Tuesday, August 3rd, 2010The Finance (No. 2) Act 2010 became law on 27 July 2010, enacting further measures proposed in the Coalition government’s June Budget. The following measures are included. The government is provided with powers to repeal the high income excess relief charge, as long as that is done before 31 December 2010. The intention is to [...]
National Insurance Contributions – Artificial pay practices and their effect on SERPS
Monday, July 26th, 2010On 22 June 2010, the Upper Tax Tribunal, in the case Mason v HM Revenue & Customs, rejected an appeal brought by Mr. Mason against the Special Commissioner’s unfavourable decision in October 2008 respecting his SERPS payments. Mr. Mason worked for 15 years on the North Sea oil rigs, between 1983 and 1998. On retirement, [...]
Emergency Budget 2010: Pensions
Wednesday, June 23rd, 2010Basic State Pension The Government confirmed its commitment to review the basic State Pension each year by the highest of earnings, prices or 2½% from April 2011. The Consumer Price Index (CPI) will be used as the measure of prices, consistent with the Government’s decision to index all benefits and tax credits by the CPI. [...]
Pension Schemes – Abolition of contracting out
Thursday, March 25th, 2010The Pensions Advisory Service has confirmed the government’s intention to abolish contracting out of the State Second Pension from 6 April 2012. From that date, members of defined contribution occupational pension schemes, contracted-out personal pension schemes and stakeholder pension schemes will automatically be brought back into the State Second Pension. The change only applies to [...]
Pension Schemes – Conservatives’ action plan for pensions
Thursday, March 25th, 2010On 18 March, the Works and Pension spokeswoman, Theresa May, announced the specific actions that a Conservative government would take on pensions: The 2012 reforms for auto-enrolment and the National Employment Savings Trust (NEST) will be addressed; auto-enrolment may be brought forward from 2012 on a voluntary basis, allowing employers to plan for implementation. Concerns [...]
Pension Schemes – Tax rate increases on pension schemes benefits
Friday, March 19th, 2010By means of the Taxation of Pensions Schemes (Rates, etc) Order 2010, the Government has increased the rate of two tax charges applicable to pension schemes. Short service refund lump sums The first is to the tax charge on the payment of short service refund lump sums to pension scheme members who leave employment with [...]
State Pension Age – Guidance, or the lack of it, on 10-year equalisation process
Friday, March 19th, 2010Between April 2010 and April 2020, the state pension age for women will rise from 60 to 65. By way of reminder, the effect of this change, which has been in legislation for many years, is that women born before 6 April 1950 will be able to claim their state pension at age 60 after [...]
Pension Schemes – Normal minimum pension age rises from April 2010
Wednesday, January 20th, 2010Pension reforms introduced in 2003 introduced a single minimum pension age of 50 for all registered occupational and personal pension schemes. This minimum age increases to 55 from 6 April 2010. From that date, pension scheme members will normally only be able to draw their pension when they are 55 or older. Scheme members between [...]
National Employment Savings Trust – Final regulations presented to Parliament
Wednesday, January 20th, 2010Summary A series of statutory Order and Regulations have been published that describe most of the final structure of the NEST scheme that will be introduced in 2012. In particular, they provide information about the operation of the new Corporation that will act as Trustee to the scheme, and the four-year implementation timetable so that [...]
Pensions – Tax relief on pension contributions
Friday, December 18th, 2009Summary From 2011/12, a “high income excess relief charge” will be imposed on “high income” individuals, i.e. those with annual gross income (including employer pension contributions) of £150,000 or more and who, in addition, have gross income (excluding employer pension contributions) of not less than £130,000. The effect of the charge will be to restrict [...]
