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MyCompanyPension.co.uk - Helping members of occupational pension schemes to better understand their benefits.
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:: Blog | June 2009 (15 blogs) | Pension cap problems
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Pension cap problems
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You might recall that with effect from April 6th 2009, new regulations came into effect concerning the statutory pension revaluation cap and the statutory escalation cap.
Trustees are able to amend the revaluation and escalation cap contained within their scheme rules by resolution and with employer consent.
However, employers cannot seek to impose the new cap without agreement from the trustees. Somewhat ironic therefore, given that a sponsoring employer can close a pension scheme without trustee consent once it has undertaken the appropriate consultation.
The savings for defined benefit schemes are estimated to be in the region of £250m to £400m, and it has been argued that employers should have been able to exercise the amendments on their own.
Given that employers are generally seeking ways to reduce pension costs, this was welcomed regulation. However, approximately one in four schemes are unable to make the necessary changes according to the debate in the House of Commons. See:
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Mike Jones, MyCompanyPension.co.uk Ltd, June 12th 2009
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