The 2017 edition of your Pensions newsletter is available below, in which we will provide details of pension increases for 2017/18 and helpful information that may be relevant to your pension benefits.
HM Revenue and Customs impose two controls on the amount of pension savings you can make without having to pay extra tax. These controls are known as the annual allowance and lifetime allowance. This is in addition to any income tax you pay on your pension once it is in payment.
The allowance factsheets look at the total value of all pension benefits you can have without triggering an excess benefits tax charge and also how the value of your pension benefits may increase in any one year without you having to pay a tax charge. Further guidance can be found on private pension contributions is available on GOV.UK.
New data protection regulation
On 25 May 2018 the EU General Data Protection Regulation comes into force. The LGPS have produced a helpful document outlining what this could mean for its members.
High Court judgement in the case of Elmes v Essex
This case concerns Nichola Elmes versus Essex County Council with an interested party of the Ministry of Housing, Communities and Local Government. This is a similar case to that decided upon in the Supreme Court on 8 February 2017 concerning Denise Brewster versus NILGOSC (Northern Ireland LGPS).
The case was heard before the High Court on Tuesday 18 January 2018 and declared that:
The requirement to nominate a person under regulations 24 and 25 of the LGPS (Benefits, Membership and Contributions) Regulations 2007 is incompatible with Article 1 of the first Protocol to, and Art 14 of, the European Convention on Human Rights and must therefore be disapplied.
It is our understanding that the outcome of this case effectively removes the requirement for a nomination form from regulations. It also enables an LGPS administering authority to pay a partner’s pension to the partner of a deceased member who died without completing a nomination form, and who left active membership on or after 1 April 2008 and before 1 April 2014. (A partner meets the definition of a co-habiting partner, set out in schedule 1 of the LGPS Regulations 2013.)
Lifetime allowance scheme administrator look-up service
HM Revenue and Customs (HMRC) have launched a Lifetime allowance look-up service online allowing members to check their protection status. To do so, members will need their protection notification number and scheme administrator reference number which can be found through the 'view it online' link on Pension schemes: protect your lifetime allowance (GOV.UK).
2018 pensions increase
HM Treasury confirmed that the rate of Consumer Price Inflation (CPI) for September 2017 was 3.0%. The CPI is used to determine the increases applied to the annual pension accrued each year whilst an active member of the scheme, as well as the increases applied to pensions whilst in deferment (frozen) and pensions in payment.
HMRC’s Countdown bulletin 30
As part of the ending of contracting-out, pension schemes have been carrying out a reconciliation of their records to ensure the details held with regards to contracted out pension scheme membership agree with those details held by the Department for Work and Pensions (DWP).
Originally, DWP intended to send statements out to members setting out what details are held for them, however members are now expected to use the Check your State Pension (GOV.UK) service to check these details themselves.
If you are thinking about how to invest your retirement savings, follow the Pensions Regulators five steps to protect your pension.
The Government are introducing three measures to tackle pension scams:
- a ban on cold calling in relation to pensions
- limiting the statutory right to a transfer to a Financial Conduct Authority (FCA) authorised personal pension, an authorised master trust scheme and where a genuine employment link to the occupational scheme can be evidenced
- allowing only active companies to register a pension scheme (and de-registering pension schemes for dormant companies).