Compliance round-up for July

The government announced a series of legislative changes between June and July 2013. These include:

  • It is to axe automatic annual pay rises in the civil service as part of a pledge to make £11.5 billion worth of public sector savings in 2015/16. The proposed legislation, announced in the Spending Review 2013 confirmed that public sector pay rises will be limited to an average of up to 1% for 2015-16.
  • The restrictions on the National Employment Savings Trust (Nest) will be lifted in April 2017. The regulations include a cap on annual contributions, as well as a ban on transfers in and out of the scheme.
  • The Pension Protection Fund (PPF) cap level is to be increased. The new rules mean that an employee whose employer goes bust before he or she reaches the scheme’s normal pension age will generally see his or her benefits reduced in two main ways: compensation will cover 90% of (broadly) the pension the member would otherwise have been entitled to from the scheme, and the member’s scheme pension will be restricted to a statutory compensation cap, currently set at £34,867.04 for a 65-year-old, even before this 90% adjustment is applied.