Member Article

The government announced radical changes to the existing rules regarding the way in which people access and use their pension savings in the UK as part of the 2014 Budget. It is proposed that from April 2015 DC pension savers will no longer have to buy an annuity and will be able to access their full fund on retirement and invest it as they wish. In addition, the existing rules around lump sums on retirement and drawdown have been relaxed with effect from 27 March 2014. See our previous bulletin article here for more information.

The Pensions Regulator has issued a statement, “2014 Budget: update for DC pension schemes”, aimed at trustees and others involved in the governance and administration of occupational DC schemes, to help them to understand what these announcement may mean for their scheme and members.

As well as summarising the key aspects of the Budget announcements, the statement highlights that trustees should consider how the changes and proposed changes will affect their scheme. Consideration should be given to what communications, if any, to send to members about the changes and also of any impact on communications issued before the Budget. It also notes that trustees should be prepared to respond to questions from members about the impact of the announcements on their scheme and the members’ benefits and options.

The Regulator’s statement can be accessed here. If you would like to discuss the Budget 2014 and the impact it may have on your scheme or members, or the Regulator’s statement, please get in touch with your usual S+W contact.