Weekly update on new developments in the pension industry for week ending 9 January 2018: Countdown Bulletin 31 | HMRC Digest of DTTs updated | Financial Assistance Scheme (Increased Cap for Long Service) Regulations 2018 | New rates and thresholds guidance released for employers | Deficits fall in 2017 |
Countdown Bulletin 31
Contracting-Out Countdown Bulletin 31 was published on 2 January on GOV.UK. It includes updates on:
- Scheme Cessation Guidelines
- Type 7 Query Process
- Limited Rate Premiums (LRPs) and Contribution Equivalent Premiums (CEPs) refunds
- Business as Usual CEP’s
- Not In Scheme (NIS) - CEP Automation Solution
- Member Types
The Bulletin clarifies that HMRC scheme cessation timelines have not changed from those previously outlined in edition 14 of the bulletin.
HMRC Digest of DTTs updated
HMRC have released an updated version of the Digest of Double Taxation Treaties which provides guidance on double taxation relief and lists current treaties. This is relevant to pension schemes and their members where pensions are paid overseas and / or contributions are made for non-residents.
Financial Assistance Scheme (Increased Cap for Long Service) Regulations 2018
This draft statutory instrument provides that the Financial Assistance Scheme (FAS) may pay a higher amount of assistance to capped FAS members who have long service in a single pension scheme. This amends provisions in the Financial Assistance Scheme Regulations 2005, which imposed a cap on the amount of financial assistance payable to FAS members.
New rates and thresholds guidance released for employers
HMRC has released guidance on rates and thresholds for employers. It is intended to help employers while they are operating payroll or providing expenses and benefits to their employees.
The guidance applies between 6 April 2018 and 5 April 2019. It includes, among other things, figures and guidance on:
- PAYE tax and Class 1 National Insurance contributions
- tax thresholds, rates and codes
- emergency tax codes
Deficits fall in 2017
JLT Employee Benefit’s monthly index reveals that that the cumulative deficit of private sector defined benefit (DB) schemes has fallen from £187 billion to £150 billion over the 2017 year. This marks a fall of £37 billion between 31 December 2016 and 31 December 2017.
The index shows that DB schemes ended the year with £1,634 billion in assets, outweighed by liabilities of £1,773 billion, calculated on the IAS 19 standard accounting measure. The funding ratio of DB schemes increased by 6.2 percentage points, rising from 85.3% in 2016 to 91.5% in 2017. FTSE 100 scheme deficits fell from £55 billion to £42 billion, while FTSE 350 schemes also experienced a fall from £68 billion to £52 billion over 2017.
John W. Wilson LLB(Hons) FPMI ACII, Head of Research| Email: firstname.lastname@example.org
Stephen Williams, Senior Research Consultant | Email: email@example.com