HMRC Pension Scheme Services has published two Newsletters so far this month. This article summarises their contents, and goes on to report on other recent announcements from HMRC of interest to pensions practitioners. A summary of secondary legislation published this month also follows.

The main feature of Pensions Tax Simplification Newsletter No 26 is a useful summary of the 2007 Budget and regulations laid or drafted since late February, which have already been reported on this website and elsewhere. The Newsletter nevertheless serves as a handy concise service to those who may have missed something. In this vein it also notes the reminder issued on 5 March about the need for anyone establishing a registered pension scheme that is not an occupational scheme to be FSA-authorised. The attention of searchers for guidance on employers' contributions is drawn to the Business Income Manual.

A reminder about the new two-page helpsheet [PDF] for Scheme Administrators is offered. This is aimed at those individuals who are Scheme Administrators, but who are not directly part of the pensions industry; for example, trustees of insured schemes where the insurer has declined to take on the role of Scheme Administrator under the new regime. It is important that those who are undertaking this role (especially where by default) are aware of what it entails and their obligations to HMRC.

The rest of Newsletter 26 and Newsletter No 27 are concerned with Pension Schemes Online and new forms, most of which again has already been reported on this site. A useful addition is a new set of Frequently Asked Questions (FAQs) pages on the following:

• Event Report
• Registered Pension Scheme Return
• Notice to file Pension Scheme Return or Audited Accounts
• Application to register a pension scheme

Copies of the new registration forms and completion notes are now available, in pdf format. A revised version of the Event Report form (APSS300 [PDF] is also available with associated insert pages and completion notes, each as separate pdf downloads.

A feedback form has been added, accessible from the Pension Schemes Online logout page; don’t expect a reply, however.

Three other important recent announcements from HMRC:

• Tables of contracting-out rates for 2007/08
• The monthly update to the QROPS list [PDF] (issued on 5 April)
• A statement of relief for life assurance premium contributions (ie pension term assurance - PTA). This provides welcome clarification on two aspects:
  1. pipeline cases: the deadline for processing applications made by midnight on 13 December 2006 is extended to 31 July 2007, to allow medical evidence to be collected.
  2. applications received by the insurer after 13 December 2006 but before midnight on 12 April 2007 (= date of this announcement), where there is a contractual obligation to fund associated pension benefits, may also be accepted if a commencement date is settled before 31 July 2007. This is because some insurers, at least, understood the PBR announcement to refer only to stand-alone PTA and continued to accept business tied to provision of pension benefits.

(This is not quite the end of the PTA saga; the ABI continues to negotiate over various other 'pipeline' scenarios apparently not envisaged by the Treasury.)

New Statutory Instruments

1. The Pension Protection Fund (Pension Compensation Cap) Order 2007 (SI 2007/989). The compensation cap is an amount used by the Board of the PPF to determine the amount of compensation payable to a person who is under normal pension age on the assessment date (as described in paragraphs 2 and 34 of Schedule 7 to the Pensions Act 2004) and whose compensation is not derived from a pension payable on the grounds of ill health or a survivor's pension. A person entitled to a scheme pension which exceeds the compensation cap receives compensation of 90% of the compensation cap. The 2007 Order sets the cap at £29,928.56, so the maximum compensation payable from 1 April 2007 is 90% of this amount, ie £26,935.70.

2. The Occupational Pension Schemes (Levies) (Amendment) Regulations 2007 (SI 2007/994). This is the somewhat notorious SI which increases the administration levy by 48% (see previous Aries report).

3. The Occupational Pension Schemes (Levy Ceiling) Order 2007 (SI 2007/1012). This sets the ceiling for the year beginning 1 April 2007 at £804,450,000 and is unchanged from the draft Order on which we reported earlier.

4. The Social Security (Contributions) (Re-rating and National Insurance Funds Payments) Order 2007 (SI 2007/1052). This Order increases the rates of Class 2 and Class 3 NICs from £2.10 to £2.20 and from £7.55 to £7.80. It also increases the amount of earnings below which an earner may be excepted from liability for Class 2 contributions from £4,465 to £4,635. The Order also increases, from £5,035 to £5,225 and from £33,540 to £34,840 respectively, the lower and upper limits of profits or gains between which Class 4 contributions are payable.