SIMPLIFYING PENSIONS LEGISLATION
26 Sep 2001 12:00 AM
The Government has today appointed Alan Pickering to undertake a
comprehensive review of private pensions legislation to result in a
package of options for simplification.
Alistair Darling MP, Secretary of State for Work and Pensions said:
''The Government is determined to simplify the Pensions Policy system
to make it easier to understand and to reduce costs. Complexity makes
it difficult for pension scheme members to understand how their
pension scheme is run and provides scope for bad practice to continue
undetected. The Government is committed to working with the pensions
industry and consumer organisations to achieve simplification of the
regulatory framework for pensions where this can be done without
harming scheme members'' interests. This will provide greater
transparency for scheme members and will help employers by reducing
the administrative burden on pension schemes.
''I am delighted that Alan Pickering has agreed to lead this review.
Alan will bring an independent but realistic approach to the task. He
will be relying on input from across the industry to make the review
a success. I would encourage everyone with a contribution to make to
engage with Alan and his team.''
Notes to Editors
1. Alan Pickering has been a partner at Watson Wyatt Partners since
1992. He served as Chairman of the NAPF (National Association of
Pension Funds) from 1999 , 2001 and was previously NAPF Vice Chairman
(1997-99). Before joining Watson Wyatt Partners, Alan Pickering had a
20 year career with the Electrical Electronic Telecommunication and
Plumbing Union, including close involvement with occupational pension
schemes. He was also a member of the Occupational Pensions Board
(OPB) from 1991-97.
2. The Pensions Green Paper ''A Contract for Welfare: Partnership in
Pensions'' was published in 1998 and contained proposals for reform of
the pensions system.
3. The DWP has a service delivery agreement (SDA) to ''work with the
pensions industry and the Inland Revenue to identify ways of
simplifying the regulatory framework that do not compromise the
security of individuals'' investments. And agree by 2001 a methodology
for identifying and implementing further simplifications.'' The Joint
Working Group on Occupational Pensions (JWG , comprising the NAPF,
ABI, Association of Consulting Actuaries, Society of Pension
Consultants and Association of Pensions Lawyers) have indicated that
they are willing to work in partnership with DWP and with other
government departments with an interest in pensions to take forward a
simplification agenda as is envisaged by the SDA target. The DWP are
already working with the pensions industry to simplify and clarify
the regulations on two specific areas:
- preservation and transfer rules
- modifications to scheme rules.
4. The Terms of Reference for the Review are attached.
Public enquiries: 020 7712 2171
Website: www.dwp.gov.uk
Terms of Reference
The simplification team will be led by a senior pensions industry
figure with seconded DWP officials and outside experts in support.
The review will:
Carry out a comprehensive review of DWP private pensions legislation
to identify a package of options for simplification and the reduction
of compliance costs
Consider the principles behind the legislation as well as the
processes and ensure that the law is proportionate to the policy
purpose
Consider the means by which the regulatory framework is enforced
Identify areas of simplification which can be achieved by secondary
legislation and identify more fundamental reforms to be achieved by
primary legislation
Report to the Secretary of State by July 2002 with proposals for
simplifying the regulatory framework that do not compromise the
security of individual''s investments.
The review will have regard to:
The need to maintain effective protection for pension scheme members
Wider economic and exchequer effects
The links with and impacts on tax rules and the Inland Revenue
simplification review
The separate work to implement the recommendations of the Myners
review and to reform the Minimum Funding Requirement
The work of the forthcoming five-yearly review of the Occupational
Pensions Regulatory Authority
The DWP simplification work which is already underway
The workability and regulatory impact of its proposals.