Pensions Radar

Pensions Radar is a quarterly listing of expected future changes in UK law affecting work-based pension schemes. Please speak to your usual Travers Smith contact if you would like to know more about any topics.

Payments to employers

Key date

5 January 2011 (notice)

5 April 2011 (resolution

Trustees must pass a resolution to avoid running the risk of losing existing powers to make payments to employers. Such a resolution may be needed to allow a payment of surplus to an employer (and possibly other payments) to be made at any time after 5 April 2011. Three months' written notice must first be given to members and employers. For more detail, please see our Payments to employers briefing note.

The Government intends to ask Parliament to amend the law so that it would clearly apply only to payments of surplus from a scheme that is not in winding-up and to extend the deadlines by five years. However, the draft legislation will not be published until after the 5 January 2011 deadline has passed.

CPI to be the measure of inflation for revaluation and pension increases

Key date

2011

CPI will replace RPI as the measure of inflation for the purposes of minimum requirements for the revaluation of deferred pensions and increases to pensions in payment. The impact on private sector occupational pension schemes will depend on the drafting of their revaluation and pension increase rules. Specific advice will therefore be needed.

Additional paternity leave to be available

Key date

3 April 2011

Additional paternity (or adoption) leave of up to six months will be available to new fathers by reducing the mother's additional maternity (or adoption) leave correspondingly. Up to three months would be paid by "additional statutory paternity pay" in place of maternity pay. Paid paternity leave must be treated as pensionable service in the same way as for paid maternity (or adoption) leave.

Transitional tax regulations cease to apply

Key date

5 April 2011

This is a key deadline, with potentially serious financial consequences if it is missed.

When the new tax regime came into force on A Day (6 April 2006), transitional regulations temporarily modified existing approved schemes so that some features of the old tax regime would continue to apply (e.g. old Inland Revenue limits and the earnings cap) until the scheme was amended and the regulations were disapplied. The regulations also had the effect that benefits that would be unauthorised payments under the new tax...