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Pensions Reform – Keeping it simple

24 August 2010

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The independent review of the scope of automatic enrolment has now closed and the pension industry waits in anticipation to hear the recommendations Johnson, Yeandle and Boulding will put to the government at the end of September. At AEGON, we’re supportive of the principle of automatic enrolment, but like many in the pension industry, have concerns about some of the policy detail and the complexity for employers.

The biggest area of pension industry consensus is to increase the earnings threshold, but once beyond this, base contributions on the total, not band earnings. We’ve suggested the threshold should rise to around £10,000, allowing voluntary joining for people with lower earnings. Making these very simple changes has a big impact on making it pay to save, as it removes a substantial number of people from automatic enrolment who otherwise may be caught by the means-testing trap in retirement.

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A taxing summer for pensions

28 July 2010

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The long hot pensions Summer of 2010 continues. Parliament rises this week and Government departments are pressing ‘send’ on an array of documentation, presumably as their last act before switching on their out-of-office messages and heading for the beach. One person’s sent box is another’s in-tray.

Yesterday the Treasury issued the latest instalment of its work on restricting pensions tax relief, as part of a pack of nine (yes, nine!) consultation and discussion documents on reforming the tax system. They want input by 27 August.

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Now access really will be more flexible …

16 July 2010

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After an hour spent in one of the Treasury’s darker corners, industry representatives and other interested parties emerged blinking into the sunlight of Horse Guards Road on Thursday lunchtime, clutching in their eager hands a copy of the government’s consultation on ‘removing the effective requirement to purchase an annuity by age 75’.

It’s got to be good news that this area is receiving attention. The rules around retirement are stuck in the past and haven’t kept pace with increasing longevity and changing lifestyles.

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Competence and ethics – CP10/12

5 July 2010

Peter_Williams.gifWith all the excitement created by the issue of CP10/14 on professionalism, it’s easy to forget that a few weeks earlier the FSA published an equally important consultation paper (CP) on competence and ethics.

Only a few appear to realise that the RDR principles extend beyond the adviser. CP10/12, on competence and ethics, is a good example of this extension. The CP reminds the market that the FSA is increasingly focusing ‘…on the competence of individuals at all levels within a firm’ and lays down the ethical behaviour it expects from all, not just advisers.

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Professionalism and the RDR – CP10/14

30 June 2010

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On 28 June 2010, the FSA released its latest Consultation Paper on delivering the RDR. CP10/14 covers professionalism, including a statement of its application to pure protection advice.

Shortly after I’d completed my initial reading of the CP, a journalist phoned to ask for my reaction. I think I surprised him by being both complimentary but lacking enthusiasm.

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Important note

This blog provides the views of our industry lobbying team. The views are the opinion of the person writing the entry of the blog and don't necessarily represent the views of AEGON in the UK. They are based on their interpretation of industry developments and their current understanding of UK proposed and actual legislation, and should not be interpreted as recommendations or advice.

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