Older Pensions News Affecting the Baptist Pension Scheme

29th April 2015 - Pensionwatch

The latest edition of Pensionwatch for Members and Employers is now available:



29th April 2015 - Guideline Pensions notes for employer accounts

Revised pension note guidelines, incorporating the 2013 Valuation results are now available:



Change of Scheme Administrator

With effect from 1 October 2014, we have appointed Lane Clark & Peacock LLP ("LCP") to take on the role of administrators of the Scheme's DB Plan.  As you may know, LCP are already advisers to the Scheme and so are very familiar with the way that the Scheme operates.  A letter has been issued to Scheme Members and Employers, detailing the changes.


Changes to Pension Taxation

UK tax legislation now limits the value of pension benefits that anyone can build up each year without incurring an upfront tax charge. Whilst we do not expect this to affect most members of the Scheme, if they were to build up pension benefits in a year worth more than this “annual allowance”, then a tax charge may be payable. The Government reduced the annual allowance from £255,000 to £50,000 with effect from 6 April 2011. The Government has recently stated its intention to reduce the annual allowance further to £40,000 from 6 April 2014.

In addition, there is a limit on the total amount of pensions saving members may make across all UK tax-privileged pension arrangements throughout their life without incurring additional tax charges – this is called the “Lifetime Allowance” or LTA. For the 2011/12 tax year the LTA was £1.8m, reducing to £1.5m from 6 April 2012 and reducing again to £1.25m from 6 April 2014. This “Lifetime Allowance” may be relevant to any employees who were previously in well-paid jobs with generous pension provision. This only provides a very high level summary of the new tax regime, which is very complicated for the few people who may be affected. Please remember that neither the Pensions Team nor you as employers can give tax advice about any member’s pension position, so anyone who thinks they may be affected should seek assistance from an appropriately qualified tax/financial adviser.

Pension Liberation

Some companies are singling out pension savers and claiming that they can help them cash in on their pension early. Pension loans or cash incentives are being used, alongside misleading information, to entice savers. This activity is known as “pension liberation fraud”. The Pensions Regulator has launched an awareness campaign against pension liberation schemes, amidst reports that they have become much more prevalent over recent years. In the last four years an estimated £400m has been transferred to these schemes, involving thousands of individuals. Typically those individuals, who have been seeking early access to their pension savings, have instead ended up losing much of their savings in substantial commission payments and exceptionally large tax charges, due as a result of the payments being unauthorised. Accordingly, employees approached by anyone suggesting that they can access their pension savings early should ignore them or seek financial advice from a reputable adviser. If you would like more information on pension liberation fraud, the Pension’s Regulator’s website, www.thepensionsregulator.gov.uk, has some useful documents that set out the dangers involved.

State pension changes

The Government has recently unveiled its long-awaited plan to create a single-tier state pension for those reaching their State Pension Age (“SPA”) from April 2016. The single-tier pension will be set above the basic level of means-tested support, and is currently expected to be £144 per week in today’s earnings terms (assuming a full National Insurance Contribution history of 35 years). For most scheme members the age at which they can take their state pension is also changing. The SPA for women is rising gradually to reach age 65 in November 2018, which brings it in line with the male SPA. This will then be rising to age 66 for both men and women in 2020, with the ultimate aim of the SPA increasing thereafter in line with how long the population in general are living.

New UK accounting standards

A new accounting standard called FRS102 and an updated version of Charities SORP (statement of recognised practice) will apply from 2015. Our understanding is that the churches and other employers applying these requirements will be expected to include a liability in their balance sheet, based on the value of the future deficit contributions to the DB Plan within the Scheme. Further information will become available as the deadline for using the standard approaches, following the conclusion of the current consultation on the updated SORP.