Published On: Thu, Jul 11th, 2024
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Government urged to act immediately on pensions | Personal Finance | Finance

A legal expert has urged Chancellor Rachel Reeves to move forward several pensions policies.

Clive Pugh, partner at Burges Salmon, said the new pensions minister have a “very complex portfolio” to process including several previous Government policies.

He said: “Many of our clients have a long wish-list of issues where they would welcome early engagement from the new pensions minister.

“For defined benefit (DB) schemes, the most immediate request will be sight of the Pensions Regulator’s new DB funding code (to accompany the regulations which come into effect for schemes with valuation dates from 22 September 2024).

“But there are a host of other outstanding and ongoing legal issues.”

He said another important policy to move forward is the pensions dashboard, with the single connection deadline currently set for October 31, 2026.

Another issue is the extension of automatic enrolment as legislation has been “enacted but not yet in force” for this to be extended all workers aged 18 and over. It currently applies to workers aged 22 and over.

Mr Pugh listed other policies that need addressing, including “ironing out wrinkles in the abolition of the lifetime allowance (regulations delayed by the election), the outcome of the Virgin Media appeal (and any related DWP engagement with the issue), notifiable events (will the new regime ever see the light of day?) and, for defined contribution schemes, the promised consultation on new value for money requirements”.

Mr Pugh pointed to the manifesto promise from Labour of a review of the pensions landscape as an indication pension changes could be ahead.

He said: “We can therefore expect to see both market consolidation and productive finance remain high on the agenda, as they have been under the Conservative party’s Mansion House reforms.

“We would like to see the new Government’s pensions eco-system review, which will encompass both private and public sector arrangements, engage fully with stakeholders in the industry who will have valuable insights and perspective to offer on both the challenges for pensions and possible future solutions.”

Michael Hayles, another partner at Burges Salmon, said there may be a shift in policy away from the Mansion House reforms.

He explained: “With significant reforms to employment law promised, we may see the new Labour government look again at workplace pension rights – perhaps increasing auto-enrolment contribution rates or extending obligations to seek to address longer term concerns over pensions adequacy.”

But he also pointed to several uncertainties around pensions policy. He commented: “With a wave of insourcing of public services promised, will we see more wholesale changes to existing public service pensions arrangements?

“Climate change is likely to be a key area of focus – the Labour party manifesto has pledged to make the UK the ‘green finance capital of the world’ and to require pension funds and other financial institutions to ‘develop and implement credible transition plans that align with the 1.5C goal of the Paris Agreement’ but what will this requirement look like and how will it be implemented?”

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