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Welcome to our third newsletter of 2010.
We hold a live online Q&A session every month, usually on the second Wednesday. During the session, our experts will answer any pension related questions you may have.
The next live online question & answer session is on Wednesday 14 April 2010 between 2pm and 3pm.
Click here for further information about the Live Q&A and view previous sessions
The State Pension rates for 2010/11 are:
There were no surprises in the Chancellor's Budget on 24 March. Here is a summary of the announcements relating to pensions.
The government announced a few years ago that they would abolish contracting out of the State Second Pension (S2P) through defined contribution (DC) pension schemes. But they had not committed to a specific date.
Earlier this month, the government announced that contracting out would be abolished with effect from 6 April 2012. Anyone contracted out though a DC scheme will be automatically contracted back in to the S2P from 6 April 2012.
Members of defined benefit (DB) schemes will be unaffected by this change.
The State Pension, once in payment, increases each year. But pensioners who have retired permanently to a country outside of the European Economic Area (EEA)* or to a country without a reciprocal agreement**, do not get this increase.
A group of ex-pats have been trying for eight-years to get this changed so UK pensioners living in countries such as Canada, Australia and South Africa can get the annual increase.
On 16 March 2010, the European Court of Human Rights rejected the latest appeal with an 11 to 6 majority.
* The EEA countries are Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Denmark, England, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Northern Ireland, Norway, Poland, Portugal, Romania, Scotland, Slovakia, Slovenia, Spain, Sweden and Wales.
** Countries with reciprocal agreements are Barbados, Bermuda, Bosnia-Herzegovina, Croatia, Israel (the agreement with Israel applies to the territory administered by the Government of Israel on 19 July 1956), Jamaica, Jersey and Guernsey, Isle of Man, Mauritius, Montenegro, Philippines, Republic of Macedonia, Serbia, Turkey and USA.
Click here to read more about receiving the State Pension whilst living outside of the UK
The government has this month announced the expected charging structure for the new National Employment Savings Trust (NEST).
The charges are likely to be:
To cope with the initial "inevitable gap between costs and revenues", the government has announced that it will make a loan to NEST to cover those costs. This will hopefully ensure NEST can be delivered at no overall cost to the taxpayer.
Pensions minister Angela Eagle said: "This is a fair and sensible funding package which delivers the Pensions Commission's vision of a low cost scheme in an affordable way.
"It balances the needs of members, taxpayers and the interest of the broader pensions industry. Market failure for low and moderate earners means they have not had access to a suitable low cost pension scheme and have not been able to save for their retirement. NEST will put this right."
Click here to read more about NEST
The National Association of Pension Funds (NAPF) has set out the six steps politicians must take to fix the UK's pension system.
Investment Council Chairman of the NAPF, Ray Martin, said "The noughties were a lost decade for pensions. Ten years ago there were two million more people in private sector defined benefit schemes than there are today. By anybody's standards that's an astonishing decline.
"Politicians must take urgent action to fix workplace pensions. Ahead of the General Election, and ahead of the Budget in two weeks time, the NAPF calls on political parties to set out the steps they will take."
The six key actions the NAPF believe politicians should take are:
Last year Fujitsu announced they were considering closing their final salary pension scheme in March 2010 (as well as over 1,000 redundancies and pay freezes). Workers from the IT services company then held a number of strikes in protest.
This month the workers' union has announced that an agreement has been reached and closure of the pension scheme has been delayed until at least March 2011. In addition, workers are to receive a 5% pay increase as compensation for the scheme's closure.
Tata Consultancy Services (TCS) has been named as scheme administrator for the National Employment Savings Trust (NEST). TCS has signed a ten-year contract which will begin in October 2010.
Tim Jones, Personal Accounts Delivery Authority (PADA) Chief Executive, said: "As we proceeded through our detailed procurement process TCS emerged as an extremely strong bidder, both in terms of their capabilities in pension administration and in their ability to provide value for money for NEST members. Signing the contract early, in stages, allows us to get on with our work to deliver NEST."
Over the past month, more firms have announced the closure, or planned closure, of their final salary pension schemes. They include Taylor Wimpey (the construction company) and Savills (the estate agent).
Over the next few months, we will be out and about, hosting stands at the following show(s). We will be more than happy to talk to visitors about any pension-related issue.
Retirement Show - London Olympia - 16-17 July 2010
State Pension Ages are changing for men and women.
Between 2010 and 2020, the SPA for women will increase to 65 to ensure equality. Women born between 6 April 1950 and 5 April 1955 are affected by this change.
Between 2024 and 2026, 2034 and 2036 and 2044 and 2046, the SPA for both men and women will rise to 66, 67 and 68, respectively. Those born after 6 April 1959 are affected by these changes.
Click here to use our SPA Calculator and see when you will be able to draw your State Pension
We're always keen to know how our website can be improved. Please therefore take a couple of minutes to fill out our feedback form.
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TPAS is manned primarily by volunteers. We are always on the lookout for new volunteers so, if you work in the pension industry and want to give some of your spare time to helping people with pension problems, please let us know.
Click here for more information about volunteering
If you have any pension questions, please feel free to contact us by calling our helpline on 0845 601 2923, emailing firstname.lastname@example.org or writing to us at 11 Belgrave Road, London, SW1V 1RB.
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