At the same time as the new regulations concerning auto-enrolment (see previous article) appeared this week, the Government published the first legislation referring to NEST, the future name of what has up to now been known as Personal Accounts (see Aries article).

The Pensions Act 2008 (Commencement No. 5) Order 2010 (SI 2010/10) brings into force ss 75 (in so far as not already in force) and 76 of, and Sch 1 (in so far as not already in force) PA 2008 on 5 July 2010. This is all about a body corporate referred to as the trustee corporation.

The National Employment Savings Trust Corporation Naming and Financial Year Order 2010 (SI 2010/3) provides that from 5 July 2010 the name of the body corporate referred to in s.75 PA 2008 shall be the National Employment Savings Trust Corporation.

The Transfer Values (Disapplication) Regulations 2010 (SI 2010/6), coming into force on 5 July, prohibit the transfer of pension funds out of the National Employment Savings Trust scheme, except in certain circumstances relating to pension sharing on divorce. This restriction on transfers, along with an annual contribution limit (the amount which can be paid in to the scheme each tax year), are specific measures in this legislative package to focus the scheme on the target market of moderate to low earners.

The Application of Pension Legislation to the National Employment Savings Trust Corporation Regulations 2010 (SI 2010/8)
and
The National Employment Savings Trust (Consequential Provisions) Order 2010 (SI 2010/9), both coming into force 5th July 2010, make minor modifications to existing pension legislation, for instance, disapplying the requirement to have member-nominated trustees, as this is not considered appropriate for a scheme of this nature, and providing that the requirements of "trustee knowledge and understanding" - a knowledge of the scheme's documentation, such as the Order, Rules and Statement of Investment Principles, and of trust and pension law - apply to the trustee of the scheme.

The Personal Accounts Delivery Authority Winding Up Order 2010, also destined to come into force on 5 July, winds up and dissolves the Personal Accounts Delivery Authority (PADA) and makes provision for the transfer of its property, rights and liabilities to The National Employment Savings Trust Corporation.

This is a draft SI which requires approval by resolution of each House of Parliament, under s.23(8) PA 2007.

The National Employment Savings Trust Order 2010, also destined to come into force on 5 July, establishes a pension scheme known as the National Employment Savings Trust ("the Scheme") and makes provision for its administration and management and incidental matters.

This too is a draft Order, laid before Parliament under s.143(4) PA 2008, for approval by resolution of each House of Parliament.

All the above documents (and more on the workplace pension reform programme) are presently accessible from the DWP website.

Retirement age

Meanwhile, in a speech to the charity Age UK on 11 January, Cabinet Minister for Equality Harriet Harman said that under the Equality Bill currently before Parliament, the Government

"will ban age discrimination for anyone in the public or private sector providing goods and services. This will come into force in 2012 across the board, including in health and social care sectors."

Ms Harman also noted that

"many people say they would work past 65 if their employer allowed them to. It's time to look at this again. Some people prefer to take early retirement, others prefer to keep working. We want to give older people flexible retirement options to give them choice."

"We're therefore bringing forward our review of the Default Retirement Age, which was scheduled for 2011 - but we're bringing it forward to this year. We've already begun the process of discussing this with organisations such as the CBI, trade unions and yourselves, and gathering evidence to inform this review."

The Daily Telegraph decided this meant it was settled:

"workers would not be forced to work beyond 65, but would have the option to choose to"

That apparently prompted the Department for Business Innovation and Skills to swiftly reassure businesses that this was not true: the Government had made no decision to use the Bill to abolish the default retirement age.

Information about the review of the default retirement age (DRA) can be found on the BIS website. Submissions are requested by 1 February 2010.

Had the Government not committed to bring forward the review, the High Court's decision in the Heyday case that the adoption of age 65 as the default age is a proportionate means of achieving a legitimate aim would have gone the other way, in favour of Age Concern. The Hon. Mr Justice Blake said (para 128 of the judgement) that if

"there had been no indication of an imminent review, I would have concluded for all the above reasons that the selection of age 65 would not have been proportionate. It creates greater discriminatory effect than is necessary on a class of people who both are able to and want to continue in their employment. A higher age would not have any general detrimental labour market consequences or block access to high level jobs by future generations. If the selection of age 65 is not necessary it cannot therefore be justified. I would, accordingly, have granted relief requiring it to be reconsidered as a disproportionate measure and not capable of objective and reasonable justification in the light of all the information available to government."

A survey by the law firm Eversheds last September found most employers wanted the law on compulsory retirement age to stay as it is. At present, employees can request to stay on beyond 65, but the employer does not have to grant this.

The Social Security (Contributions Credits for Parents and Carers) Regulations 2010 (SI 2010/19), made on 5 January and coming into force on 6 April 2010, flesh out legislation which replaces Home Responsibilities Protection and extends the range of carers whose entitlement to State Pension and Bereavement Benefits is protected. Taken together with other Pension Reforms, the intention is that caring should be recognised as being on a par with paid employment for pension purposes. The primary legislation provides that 'engaged in caring' should be defined in regulations.

Section 3 of the Pensions Act 2007 makes provision for 'relevant carers', such as parents and people looking after a sick or disabled person, through the award of weekly Class 3 National Insurance credits for caring activities. These credits will count for State Pension, Bereavement Allowance and Widowed Parent's Allowance and replace Home Responsibilities Protection for contributors who reach pension age on or after 6 April 2010 or who die on or after 6 April 2010 without reaching pension age before that date.

The legislation inserts a new s.3A into the Contributions and Benefits Act 1992. This recognises those awarded Child Benefit for a child under 12 and approved foster parents and provides for regulations to be made to define those who are 'engaged in caring' and to specify when and how an application for credits needs to be made.