Week ending 1 November 2019
In the latest Pension Schemes Newsletter HMRC has said that it is aiming to publish high level guidance on tax issues arising from GMP equalisation in December 2019. This will cover:
- lifetime allowance (LTA)
- LTA protection regimes including enhanced, fixed, primary and individual protection
- annual allowance.
However, in terms of serious ill-health lump sums, small pots and trivial commutation, HMRC is only promising a progress update in December.
Crucially, HMRC has indicated that December’s tax guidance will not cover those schemes who wish to tackle GMP equalisation by conversion.
The Continuous Mortality Investigation (CMI) has published its latest quarterly mortality figures for England and Wales which show that cumulative standardised mortality in 2019 is lower than in any of the last ten years. This reflects experience over the first 9 months of 2019, with just the critical final quarter to come.
With Parliament being dissolved next week, the Pension Schemes Bill is now dead in the water. Due to its cross-party support, the Bill is likely to return but its content will depend on who forms the next Government.
In the news this week, the long-awaited tax guidance on some GMP equalisation issues is published, BAE Systems agrees to contribute £1 billion to its main DB scheme and PACE completes a second buy-in.
Over the autumn of 2019, BAC conducted an extensive survey of the actions which companies are taking to manage their defined benefit (DB) and defined contribution (DC) pension arrangements.
2019 marked 50 years since Neil Armstrong walked on the moon and this was obviously on the Queen’s mind in her Christmas message as she talked about a bumpy year but one with small steps of progress as well. In terms of pensions, it also felt like a year of small steps and occasional bumps. In this quarter’s Arena, we take a positive look back at 2019, as well as looking forward to some expected pension developments over 2020.
Despite the very different circumstances facing individual companies, bac‘s autumn 2019 survey reveals a surprisingly consistent picture of the actions which companies are finding most attractive to manage their DB and DC pension arrangements.
As DB liabilities have become legacy issues to be managed, governance has become the umbrella term for a broad range of risk management tools. In this publication, we look at the DB governance solutions we have helped our clients to implement.
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