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It is difficult to remember a time when more change has been looming for pension schemes
and those who run them. Driven by three imperatives, namely the need to protect employees’
pensions, the desire to simplify the Inland Revenue’s complicated rules for tax-advantaged
pension arrangements, and the requirement for the Government to transpose the
EU Pensions Directive into UK law, Parliament has passed two massive pieces of legislation:
the Finance Act 2004 and the Pensions Act 2004. Between them, these run to over 500 pages of
pensions-related law.
This area contains a series of factsheets outlining the requirements of the Government’s
new pensions legislation. These are organised into a number of themes: Plan Design, Governance,
Finance and Investment, Administration, Winding up, and Communications. Owing to the complicated
nature of the legislation and the myriad variations of pension arrangements, the factsheets do
not attempt to cover every detail, merely to summarise the provisions so that those responsible
for schemes can identify those on which they will need to take action.
Despite its size, the Pensions Act 2004 is light on detailed
requirements and so the Government is to make a large number of regulations over coming months
to specify how pension schemes must comply. In conjunction with these, the new Pensions Regulator
is to issue codes of practice, outlining best compliance practice. In addition, the Inland Revenue
is also making regulations (although by no means as many), fleshing out the Finance Act provisions.
As these emerge, we shall review the factsheets and, as necessary, amend them on online and also mail them to readers of our Pensions News publications.
One thing is for certain, 2005 is not going to present an opportunity for quiet reflection and contemplation.
This note gives a broad outline of the provisions. Action should not be taken on the basis of the
information provided without seeking specific advice. Please note that some provisions may be amended in the Finance Act 2005.
Authorised and regulated by the Financial Services Authority.
Global News
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Working together to migrate in-house
pensions administration