Pension History

The stirrings of revolution

In June 2005, the Pensions Regulator’s second Code of Practice came into force. Dealing with Notifiable events, it followed hard on the heels of the first Code, issued three months earlier.

You remember some days more than others….

On 17th May 1990, the European Court of Justice handed down its judgement in the celebrated case of Barber v Guardian Royal Exchange. Mr Barber had been dismissed at age 52 and awarded a deferred pension at Normal Retirement Date, age 62. He complained that in the same circumstances a woman would have been entitled to an immediate pension.

Playing pensions politics

On 6 April 2006, a new pensions tax regime came into force introduced by the then Labour government. ‘A -day’ created a single framework to replace the eight different regimes which had previously applied.  Key features were the new Lifetime and Annual Allowances, set at £1.5 million and £225,000 respectively.

It’s always about investment

In March 2020 the Pensions Regulator published guidance to pension trustees about the conflict in Ukraine. Noting that schemes were adopting a range of responses, from writing down the value of Russian assets to disinvesting entirely where practical, it reminded them that they needed to prioritise their fiduciary duties “although you can also take account of other factors, such as member views on ethical and social governance. Your decisions should also reflect your scheme’s investment policy as set out in the statement of investment principles.”

Back to the future?

By February 2018, all employers had to comply with the auto-enrolment requirements of the Pensions Act 2008. The objective was to increase the number of employees who were accumulating workplace pensions – particularly important in the private sector, where the closure of final salary schemes to new entrants and to future accrual was accelerating. Under the new rules, an employee qualifying for auto-enrolment had to make a conscious choice to opt out and forgo prescribed minimum contributions.

Pensions wealth

The value of pension rights only seeped into public consciousness towards the end of the last century. The personal finance columns of popular newspapers began to highlight the importance of pension rights as well as the family home.

Inefficient women…

Pensions tend to loom in the public consciousness if expectations are disappointed, legal or regulatory constraints misunderstood, or because there is not enough money. All featured when females’ State pension age was increased from age 60 to age 65 in stages up to November 2018. Protests, lobbying and a Court challenge were the result. Change had been driven both by the cost of increasing longevity and to comply with equal treatment legislation.

Complexity has consequences… Who knew?

In September 2005, a significant change took place. An employer leaving a final salary group scheme would now have to meet its share of any scheme deficit on a full buy out basis rather than the MFR basis prescribed in earlier legislation.

The day the Defined Benefit pension scheme died?

On this day 25 years ago, 2 July 1997, the Chancellor of the Exchequer, Gordon Brown MP, delivered the budget which has been accused of dealing a death blow to defined benefit pension schemes in the UK.

In his budget statement to the House of Commons, Mr Brown stated that “British companies have invested too little and too late in the economic cycle.” To encourage companies to re-invest rather than distribute profits, he proposed a “structural reform to encourage investment”: