The Consumer Prices Index (CPI) was unchanged in the year to February 2015 (i.e. the 12 month rate was exactly 0.0%), a record low. With further falls in inflation later this year seeming a distinct possibility, we consider the impact of deflation on occupational pension schemes.
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SHPS has recently written to participating employers to provide preliminary results of the 30 September 2014 valuation which, as expected, confirms a significant increase in contribution requirements. This note summarises these preliminary results and also provides details of the results of the employer consultation around future service defined benefit structures from 1 April 2016 and other considerations for SHPS employers.
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In the last Budget of this Parliament, the Chancellor announced plans to extend the Flexiday freedoms from April 2016 to individuals who have already purchased an annuity, by reforms intended to create a secondary annuity market. He also announced plans to cut the lifetime allowance from its current level of £1.25M to £1.0M.
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It now seems a long time since the second note in our ‘Countdown to Flexiday’ series in which we discussed fears that defined benefit (DB) to defined contribution (DC) transfers would be banned. In this note, the eleventh in the series, we discuss the latest developments on DB to DC transfers and the implications for trustees and employers.
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The new single tier state pension will be introduced on 6 April 2016, replacing the existing basic state pension and state second pension (S2P). At the same time, the option for defined benefit (DB) schemes to contract out of S2P will cease to exist. Employers with open contracted-out DB schemes will therefore need to decide how to respond to the abolition of contracting out. A new set of regulations provides one possible route for employers to amend their rules.
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