Three pensions consultations announced in November

Government consultations on pension changes, defined ambition pensions and money purchase schemes were announced in November. They are:

Consultation on defined ambition pensions

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Consultation on money purchase schemes

  • The DWP is also consulting on money purchase schemes in an attempt to clarify the definition of money purchase included in section 29 of the Pensions Act 2011.
  • The consultation is open to pension industry bodies, trustees or scheme managers, pension scheme members and employers until 12 December.
  • Under the proposals, organisations will be required to take four steps; submit their first scheme funding valuations by March 2015, calculate employer debts on any employer exits, pay Pension Protection Fund levies from 2015/16 and apply the new definition for wind-ups which began on or after July 2011.

Consultation on pensions charges

  • The DWP proposes a cap on pension charges, which has been split into three options; a charge cap of 1% of the funds under management; a lower charge cap of 0.75%, reflecting the charging levels already being achieved by many schemes; and a two-tier ‘comply-or-explain’ cap, which would set a standard cap of 0.75% for all default funds. 
  • The consultation opened on 30 October and closed on 28 November 2013.
  • Better workplace pensions: a consultation on charging follows the Office of Fair Trading’s market study into defined contribution pensions.