New defined benefit funding regime

Updated draft Regulations published

The Pension Schemes Act 2021 provided for a framework for a new defined benefit funding regime. In particular, the framework would require defined benefit schemes to have a funding and investment strategy for the purpose of ensuring benefits under the scheme can be paid over the long term. The detail of what this would mean in practice was to be set out in regulations.

In response to the consultation it held on the initial set of draft regulations, the government has now published the revised draft Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024. The industry will be pleased to hear that a number of the concerns raised in the consultation responses have been taken on board and reflected in the new regulations.

Insights

The Autumn Budget 2024: what does it mean for pensions?

Much of the Government's commentary in the run up to this week's Budget focussed on the "£22 billion black hole" the Chancellor has identified in the public finances. Indeed, those who played "Budget Bingo" while watching on Wednesday will have been excited to hear Rachel Reeves mention the £22 billion black hole no fewer than five times. The cost of current pensions tax relief is estimated to be £48.7 billion. So, no surprises that the Chancellor is seeking to plug that black hole with further limits on pensions tax relief.

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Getting Britain moving: A pensions perspective

On 9 July 2024, Stephenson Harwood LLP and AtkinsRéalis are hosting a Top Table Lunch during which Juergen Maier (who is leading a Rail and Urban Transport Review for the Labour party) will be in conversation with Stephenson Harwood partner Tammy Samuel. Following Labour's win at the general election on 4 July 2024, this will be the first opportunity for the rail industry to learn more of its plans..

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Lifetime allowance abolition – an update

The UK Lifetime Allowance (LTA) tax charges ceased to apply from 6 April 2023, and the LTA itself was abolished with effect from 6 April 2024. Rather than a simple abolition, the LTA has, however, been replaced by lump sum allowances which continue to limit the amount of tax-free cash that an individual can receive from registered pension schemes and from some overseas schemes that hold UK tax-relieved amounts.

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