Yesterday The Pensions Act 2007 (Commencement No.3) Order 2009 (SI 2009/406) appeared, bringing into force s.14 of the Pensions Act 2007 on 1 March 2009 for the purpose of making regulations and on 6 April 2009 for all other purposes. Section 14 introduces new provisions to allow Guaranteed Minimum Pensions to be converted into other pension benefits (see previous Aries report). The draft GMP conversion regs - The Occupational Pension Schemes (Contracting-out) (Amendment) Regulations 2009 are currently before Parliament and require approval by resolution of each House. The regs are intended to come into force on 6 April 2009.

Similarly The Pension Protection Fund (Pension Compensation Cap) Order 2009 requires Parliamentary approval to commence on 1 April 2009. This will increase the cap from £30,856.35 to £31,936.32, in line with the increase in the general level of earnings, and thus the maximum compensation (90%) at age 65 will be £28,742.69.

Meanwhile The Pensions Act 2004 (Commencement No.12) Order 2009 (SI 2009/325) has set 1 March 2009 as in-force date of s.166(6) - (7) PA 2004 (duty of the PPF to pay scheme benefits unpaid at assessment date etc). A Note appended lists the provisions of the earlier PA 2004 Commencement Orders; the eleventh one (SI 2008/627) having appeared a full year ago. Most of the Act had been commenced by mid-2006, in fact. The list of those sections of which no part has yet been brought into force is now restricted to the following:

• s.118 PPF fees;
• s.187 PPF Board's powers to make transfer payments from Fraud Compensation Fund to PPF;
• s.237 combined pension forecasts;
• s.238 information and advice to employees;
• s.240 Meaning of “employer” in Part 1 of PA 1995; and
• s.308 Modification of pensions legislation that refers to employers (reg-making powers, consequential on s.239).

Last week the DWP has issued its official response to the draft Pension Protection Fund (Miscellaneous Amendments) Regulations 2008, on which they consulted back in December 2007 (see Aries article). So much water has flowed under the bridge since that as well as changing the year to 2009, when laying the regs the DWP will be taking the opportunity to add a few more provisions.

Statutory Money Purchase Illustrations (SMPI)

Finally, Aries has learned that the DWP will be amending The Social Security (Reduced Rates of Class 1 Contributions, Rebates and Minimum Contributions) Order 2006 (SI 2006/1009), as we expected - but unfortunately giving it low priority. The amended ARR tables will not be published until October, to come into force on 6 April 2010. This means that SMPI programs compliant with TM1 v1.3 for the time being will have to assume more optimistic rebates for 2010/11 than in fact are likely to be forthcoming.

Developments at HMRC

A potentially useful set of pensions factsheets has been updated this week, as has Form APSS413 (Notice of Appeal and Application to Postpone Payment), to accommodate a change in the appeals procedure against an assessment or penalty determination.

Draft amendments to the pensions chapter of the Inheritance Tax Manual have also appeared, covering changes to the IHT treatment of pensions, including Alternatively Secured Pensions and Scheme Pensions. A draft version of a new unauthorised payments calculator is also published.

NISPI has notified scheme administrators of improvements to Form CA1720 - Notification to the Scheme Member of the Cancellation of an Appropriate Personal Pension to make it clearer and easier to understand. When an Appropriate Personal Pension (APP) is terminated using form CA1543, form CA1720 is automatically issued by the National Insurance Recording System (NIRS2) to the individual member advising them of the cancellation. (Form CA1720 is not available on the web.). The changes to form CA1720 will be introduced on 30 March. Any CA1543 forms that are received by HMRC during the period 1 - 29 March will be processed as normal, and the new style output will be generated and issued to scheme members after the 30th.