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Unneccessary complexity may undermine Inland Revenue pension proposals 9 March 1998 The Employers Forum on Age (EFA) today welcomes moves by the Inland Revenue to increase flexibility in retirement options (Discussion paper - Occupational Pension Schemes: Enhanced Flexibility). However the EFA is also issuing a warning that the new Inland Revenue proposals are so complex that many employers will find them too costly and time-consuming to implement 'EFA members appreciate the Inland Revenue responding to swiftly and decisively to our campaign for increased flexibility in pensions', says EFA Campaign Manager Helen Garner. 'And by proposing rules that would allow gradual retirement (the ability to draw part pension while continuing to work for the same employer), they have met many of our requests. Unfortunately many pension scheme administrators may feel that the complexity of the proposed rules will make them unworkable'. There are also indications that the proposed changes may be difficult to implement for some on lower incomes (those who may not have accrued, or be entitled to, a certain level of benefits) unless the rules on SERPs are reconsidered by the DSS (Department for Social Security). It is thought that this could affect as many as 2.8 million people in a limited number of schemes, and effectively bar them from the new, flexible arrangements. In their formal response to the Inland Revenue the Employers Forum on Age will outline some fundamental principles for the new rules if they are to benefit both employers and employees. They must:
As the representative of over 80 leading employers throughout the UK, the EFA will also be offering its expertise in any consultation on how to simplify the current proposals. back to the archive |
