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QUICK REPORTS - Nov/Dec 2000 Printer-friendly version of this page
IR76 (2000): first raft of amendments
by Ian Neale 20/12/2000
On 18 December 2000 PSO issued Update No. 81, which contains a long list of changes to IR76 (2000). Subscribers to the PSO mailing list will receive a set of update pages for IR76 with their printed copy of PSO Update No. 81.
Besides about twenty of a minor nature (such as typos) there are three full pages of more important changes. Most of these amount to clarifications rather than new policy. Contrary to appearances and perhaps reasonable expectations, many comments on the September 2000 edition offered by the industry appear to have been ignored.
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DSS consults on new anti-franking rules
by Ian Neale 16/12/2000
CSPASSA Sch 5 Part II authorises the Secretary of State from 12 February 2001 to make Regs and Orders about a new minimum benefits test. This retains the essential 'anti-franking' principle that schemes may not fund GMP increases from other scheme benefits. The scheme administrator will have to break down the overall scheme pension into separately identifiable tranches of benefit and then apply the relevant rules relating to indexation and revaluation to each tranche. Finally, the tranches are added to obtain the minimum benefit which must be paid once the pension comes into payment.
The anti-franking rules have always been, as the DSS delicately acknowledges, "one of the more technical areas of pensions administration". The DSS has now published a consultation package comprising a covering letter, a draft SI, a draft Order and a substantial technical guidance document with worked examples. This is not (unfortunately) designed to abolish anti-franking altogether, but rather to modify and explain the new test.
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CSPASSA requirements in force
by Ian Neale 9/12/2000
Commencement dates are now known for many of the pensions provisions in the Child Support, Pensions and Social Security Act (CSPASSA) 2000. The outstanding exceptions are the new contracting-out arrangements and the S2P rules (ss. 30 - 35); the revised MNT arrangements (s.43); provisions to accelerate winding-up (ss. 47 - 50); and the prohibition on different rules for overseas residents (s.55).
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Equitable Life closed to new business
by Ian Neale 8/12/2000
The Equitable Life Assurance Society has announced that it is closing to new business with immediate effect. This follows the Society's failure to find a buyer, and means it has pulled out of the Stakeholder market. For details, including the negative impact on with-profits policies (bonuses are now likely to be reduced by 0.5 - 1%), go to www.equitable.co.uk
The FSA has also made an announcement
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