Once again, we all face an extremely busy year, although hopefully we will see less by way of Regulations than 2005. Some of the key events expected in 2006 are:
A-day and the implementation of the tax simplification regime introduced by the Finance Act 2004.
Legislation on age discrimination. The Equal Treatment Directive requires the UK to implement age discrimination legislation in 2006. Draft Regulations have already been published containing far-reaching exemptions for occupational pension schemes. However, consultation revealed that the draft Regulations may not cover all possible forms of age discrimination and it remains to be seen what changes will be made in the final version.
The new scheme specific funding requirements were published at the end of December 2005. 2006 will see many schemes carrying out their first valuations on the new basis. It will be interesting to see how it works in practice.
Further provisions in the Pensions Act 2004 will come into force, particularly the provisions in relation to trustee knowledge and understanding, and the new section 67 provisions on scheme amendments.
Final versions of Pensions Act 2004 Regulations will be published in relation to a wide range of issues.
The Pensions Regulator will continue to develop its role and its practice in relation to applications for clearance and approval of withdrawal arrangements.
The risk based element of the PPF levy will be implemented and it will become clear how much it is costing schemes/employers.
The Government should formally respond to the findings of the Pensions Commission.
Schemes will deal for the first time with pension rights relating to Civil Partners.
Apart from age discrimination, most of this represents the implementation of existing legislation. It would be nice to think that 2006 will not bring yet more new legislation and that there will be a period of respite from April to allow pension schemes time to come to terms with the changes required by recent legislation. Whether this will prove to be the case, only time will tell.
This article first appeared in our Pensions update January 2006. To view this publication please click here to download it as a pdf in a new window.
