Consequential amendments to the Pensions Act 2014 consultation response
The Pensions and Lifetime Savings Association (the Association) welcomes the consultation on consequential amendments to the Pensions Act 2014. As the end of contracting out nears, schemes require certainty concerning the way that administration and payment of benefits are to proceed. In particular, though we agree with most of the recommendations put forward in this consultation there are a number of areas with respect to the abolition of contracting out that remain to be addressed:
- The inclusion of a savings clause for revaluation. Such a clause would spare schemes the considerable expense of recalculating revaluation for deferred members and we would encourage DWP to bring forward such a provision as soon as possible.
- Clarity around ceasing contracting out “on” the second abolition date. It would be useful if this could be clarified to reflect the original policy intention.
- Schemes entitled to hold contracted out benefits. In many circumstances it will make more sense to convert benefits after, rather than before transfer.
- Duty to consult. We had understood that there would be guidance regarding employers’ duties to consult, if any, concerning changes that come about purely as a result of the changes to law (as opposed to changes to benefits or contribution rates where the employer makes adjustments as a result of the abolition of contracting out).