Pensions News: January 2010

March 9th, 2010 by JCB
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PENSIONS NEWS

I cannot believe another year has come and gone and that it is 2010 already.  May I take this opportunity to wish you and yours a healthy and happy new year.

The Secretariat Alternate Trustees

The last quarter of 2009 saw the appointment of a new Alternate Trustee Director.  The Association has appointed Captain Robert Baker, Chief Harbour Master of Forth Ports plc.

Benefit Statements 2009

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.

2010 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 2010, 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.

Pensions Payroll

Although it should not affect pensions in payment, just to let you know, we are doing a parallel run during the January payroll as we are changing our BACs provider and bringing the BACs transmission in-house.  The parallel run should highlight any teething problems so we should be fine when flying solo in February.

Overseas Pensions Payments

The Bank of Scotland has decided to terminate its overseas payment facility (probably due to cost cuts) from 1 January 2010.  So we had to look around for another provider that would not cost an arm and a leg.  No mean feat with so few overseas payments.  The good news is Loretta has found one, the bad news is they could not take us on until March.  This means we are paying January and February by cheque, unless requested to pay into a U.K. bank account.  Apologies for any inconvenience this may cause.

Expression of Wish Forms

Just a brief reminder that active members whose personal circumstances may have changed should review the contents of their Expression of Wish form as they may wish to make a new one.  If so, please let the Secretariat know and a new form will be sent to you for completion.

Pensions 2010

So what can we look forward to in 2010 for pensions on a legal and regulatory front?

Personal Accounts

2010 will be a year of law-making in respect of personal accounts.  Areas likely to be covered are employers’ duties and automatic enrolment, the establishment of a personal accounts scheme as well as a scheme administrator.

State Pensions

There will be changes to the State pension system, in particular, the number of ‘qualifying years’, ie number of years the full National Insurance contribution was paid, required to obtain a full Basic State Pension will drop from 44 years for men, 39 years for women to 30 years for both sexes.

Minimum Pension Age

From 6 April 2010 the earliest age from which a member of a pension scheme may take a pension (other than on ill health grounds), without higher tax charges applying, will rise from age 50 to 55.

Default Retirement Age

The government has announced that 2010 will see a review of the ‘default retirement age’ of 65.  It is expected that this age will either be raised or abolished.

Pre Budget Pledges

Public Sector Pensions

The full liability in respect of the unfunded public sector pensions will be calculated and disclosed for the first time in the 2009/10 ‘Whole Government Accounts’.  These schemes will have employer contributions capped to limit the liability to us, the taxpayers, and high earners are expected to pay more.  In theory, these reforms will save £1bn. a year.

The State Pension

The state pension will rise by 2.5% in April compared to a September Retail Price Index inflation of -1.4%.  Do you think the Government is trying to buy the ‘grey’ voters?

Tax Relief

Individuals who earn more that £130,000 and pay pension contributions of more than £20,000 pa will now be caught by the restrictions on pension tax relief.

In Brief

Equitable Life

Equitable Life will reverse last year’s cuts in policy values and award with-profit holders a 3.5% interim bonus due to improvement in investment returns during the second half of 2009.

Centenarians

The number of people over the age of 100 is set to almost double from 12,000 to 20,000 over the next ten years.  By 2050 the number could soar to 280,000 when the total number of pensioners will be around 16 million compared to 12 million today.

Branding

The Personal Accounts Delivery Authority has renamed personal accounts, following nine months of research.  They will now be known as the National Employment Savings Trust (NEST).  Let us hope these live up to their new name.

Debbie Marten