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Finance Bill 2012
The Government has published draft legislation and notes relating to the Finance Bill 2012. Of particular relevance to the pensions industry are two draft pieces of secondary legislation relating to trivial commutation and overseas transfers.
The Finance Bill is expected to be published on 29 March 2012.
GMP Equalisation
The Government has published a consultation on draft regulations and guidance which outlines a method for equalising pensions which include a Guaranteed Minimum Pension ("GMP"). The consultation will close on 12 April 2012.
GMP rules broadly mirrored the benefits payable from the State Earnings Related Pension Scheme, providing for a pension to be payable to a woman at age 60 and a man at age 65, and for the accrual rate to be higher for a woman than for an equivalent man.
Changes to TM1 Guidance
The Board for Actuarial Standards (BAS) has published a new version of Technical Memorandum (TM1): Statutory Money Purchase Illustrations (Version 2.0).
Version 2.0 is effective for SMPIs with an illustration date on or after 6 April 2012. However, providers may comply instead with Version 1.4, but only for those SMPIs issued before 21 December 2012. The relevance of this date is in connection with the ‘Test Achats’ case, where the European Court of Justice (ECJ) delivered its judgment on the Gender Directive and ruled that the use of gender as a risk factor by insurers should not result in individual differences in premiums and benefits for men and women, with effect from 21 December 2012.
