Pension News January 2009

March 14th, 2009 by JCB
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Happy New Year to you all.  I am sure 2009 will present a challenge to us all.

The Secretariat

I am pleased to report that there have been no changes within the Secretariat and Loretta is fast approaching her first full year with the P.N.P.F.

Alternate Trustees

The last quarter of 2008 saw the resignation of Peter McArthur, a Manchester pilot, as an Alternate Trustee of the P.N.P.F.  To date no member has put himself forward to fill the vacancy.

Benefit Statements 2008

We are currently in the process of obtaining and confirming year end earnings for active members and should be in a position to send out benefit statements by the end of February. 

2009 Pension Increases and Calendars

Just before Christmas all pensioners and widows were sent letters confirming the percentage increase they would be receiving from 1 January 2008, as well as a calendar for the year.  If you have not received yours please let us know at the Secretariat and we will put another in the post.

Rule Changes

During the course of 2008 the Trustees made four changes to the P.N.P.F. Rules, which are summarised below:

Rule 11(2) – “A” Members.  The Trustees have adopted an upper age limit of 55 for new joiners.

Rule 18(6) (7)(8)(9) – Basic Meaning of Pensionable Service.  The Trustees have introduced part-time membership of the P.N.P.F. for employed pilots (new Rule 18(6)&(7)) and self-employed pilots (new Rule 18(8)&(9)).  This Rule also details the adjustments that will be made when calculating the benefits to reflect the part-time membership.

Rule 44(4) – Transfers.  The Trustees have agreed to give members the option of transferring out their additional voluntary contributions to another registered pension arrangement.

Rule 49(4) – Pension Sharing.  The Trustees have amended this rule which now allows ex spouses to retain a Pension Credit in the P.N.P.F.

The Rules are due to be reprinted shortly and an amended version will be sent out to all active members in due course.

Member Communications

I, like all of you, attempt to do my best to be environmentally friendly and so I must apologise for the number of trees that have been felled during 2008 to provide the member communications you have been inundated with in respect of the legal proceedings.  I cannot see this changing in 2009 as we must be seen by the court as endeavouring to keep all concerned appraised of the situation.

Fund’s Solicitor

Last year I advised you of Andrew White’s retirement and the appointment of our new solicitor at Mayer Brown.  The Trustees have decided to amalgamate the litigation and day to day legal admin under one roof and Claire Southern at Lovells is now the Fund’s solicitor.

 Pre Budget Report (PBR)

In his November Pre Budget Report the chancellor announced a number of changes to savings, pensions and taxation to be implemented over the next three years.

The main pension related announcements were:-

•  State pensioners entitled to the Christmas bonus will be paid £60 in the new year, which equates to bringing forward the April increase to the state pension to January.

•  The level of the full basic state pension will rise in line with prices by £4.55 per week to £95.25 per week in April 2009.

•  In April 2009 the age related tax allowance will be raised in line with prices to £9490 for 65 – 74 year olds and £9640 for people age 75 and over.  The government has estimated that by April 2010 only 40% of pensioners over the age of 65 will be paying income tax.

•  The lifetime allowance and annual allowance will be frozen from 2011/12 to 2015/16 at the 2011/12 values of £1.8m and £255,000 respectively.

• The government will be launching a campaign to get an estimated 1.5m individuals on low incomes, particularly pensioners, to register to receive interest on their bank or building society accounts tax free and to claim back any overpaid tax.

• High earners get dealt a blow in the PBR in that from 2010/11 the basic personal allowance for income tax will be reduced for gross incomes above £100,000 per year.  Those earning at least £100,000 per year would see their personal allowance reduced by at least 50% and no personal allowance would be available for incomes of £140,000 or more per year.

• From 2011/12 the rate of income tax on earnings above £150,000 will be 45%.

Negative Retail Price Index (RPI) Inflation

The government’s economic estimate for September 2009 is that inflation, as measured by the Retail Price Index, will be negative.  The basic state pension is increased by the September RPI or 2.5%, whichever is greater.  This means that in 2010/11 there will be an even larger real terms benefit for state pensioners.  So its not all doom and gloom!

Debbie Marten

Debbie@pnpf.co.uk