Newsbrief No 55
8th March 2004.
Contents
1. Pensions Bill 2004.
2. AGM Minutes.
3. Note from the Treasurer
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1. PENSIONS BILL 2004.
The consultations on the Green Paper about which we have written in a number of Newsbriefs has now finished and a Pensions Bill has now been issued, and will be considered by Parliament commencing in March 2004.
It is expected that the Bill will receive the Royal Assent and become an Act in November. It will be implemented by stages, commencing with the Pensions Protection Fund, and the Pensions Regulator. These may be in place from April 2005.
The 1995 Pensions Act was a watered down version of the Bill, and the original report from the Pensions Law Reform Committee. It is now clear to all that it failed in its objective to protect occupational pensions. This new Bill has already seen changes from the Green Paper and will no doubt be the subject of strong lobbying from pressure groups to weaken the protections. It is therefore vital that all beneficiaries of APS & NAPS visit or write to their MPs to ensure the Act contains adequate protections for Pension Funds.
To assist you on this we are limiting our comments to 5 issues in the Bill, they are as follows:
(i) Member Nominated Trustees.
(a) The Government commitment to abolish the Employer OPT-OUT arrangement must be enacted .
(b) All existing OPT-OUTs must be abolished not later than 3 months after the Regulation becomes effective. But certainly before August 2005.
(c) The Trustees must be responsible for the election arrangements of the appropriate number of MNTs. Either one third or a greater number. The MNTs must be representative pro rata to the numbers of Active Members & Pensioners.
(d) As at present all Pensioners & Active Members to be eligible to be elected a Trustee and to vote in the Elections.
(e) Section 196 (6) must be amended. The proposal that Trustees can only be removed only with the agreement of all trustees is TOTALLY UNACCEPTABLE as up to two thirds of Trustees may be appointed by the Employer.
(f) MNTs should be removed only by a vote of the Membership that appointed them on a simple majority of those voting.
(ii) Pension Protection Fund.
(a) The need for the PPF if an Employer becomes insolvent is urgent. The target date of April 2005 must be achieved.
(b) As the PPF will not be guaranteed by Government, it is vital that the fund be underpinned by a true Minimum Solvency Requirement.
(c) The Investment Strategy must follow the Solvency Standard. It must be predominantly based on high quality bonds for pensions in payment and accrued benefits for Active Members.
(d) Proposed compensation for Pensions in payment is 100%. But the Proposal that these should exclude future indexation should be opposed.
(iii) Pensions Regulator. The new Pensions Regulator has to be adequately funded to deal with fraud & wrong doing, which must carry custodial sentences.
(iv) Pensions Regulator Tribunal. The Tribunal should have sufficient funds to provide Scheme Members with legal assistance for Court proceedings in connection with a complaint subject the approval of the Pensions Regulator.
(v) Scheme Specific Funding. The Minimum Funding Requirement (MFR) will be replaced by a Scheme Specific Funding Requirement. We welcome this. However firm guidelines must be given to Trustees, Actuaries & Employers by the Regulatory Authorities to ensure that all accrued liabilities are covered. The maladministration of the past years must never be repeated.
2. AGM MINUTES. In the account of the AGM in Newsbrief 53 there is an Amendment on Resolution 4. Mr. Nolan has pointed out that this Resolution concerned the subscription levels for 2004/2005. Mr Nolan had proposed a resolution ( Duly seconded) that the subscription level revert to 50p per £1000 gross pension. He felt that the strength of the Association was in the number of members and nothing should be done that would deter people from joining.
The Resolution was overwhelmingly defeated.
As reported previously the subscription level of £1 per £1000 gross pension was Approved.
3. Note from The Treasurer.
Jack Shill thanks Members for their blizzard response to his request for form filling in Newsbrief 54. He points out, following several enquiries, that widows/widowers of Members are welcome as members of the Association. Of course for any Pensioner with a pension less than £2000pa Membership is FOC.
The Committee of ABAP 8th March 2004.