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TPAS Newsletter - October 2011

Update! State Pension Age

The Government announced this month their revised plan for increasing State Pension Ages (SPAs) to 66.  The changes mean that the increase to 66 will be complete by October 2020, rather than April 2020.  These proposals are not yet law and require Parliamentary approval.

Under the new proposals:

Iain Duncan Smith, Secretary of State for the Department for Work and Pensions (DWP), said: "we have listened to the concerns of those women most affected by the proposed rise in state pension age to 66 and so we will cap the increase to a maximum of 18 months. We have always made clear that we would manage any change fairly and ensure any transition is as smooth as possible."

Click here to visit the DWP's website and read their press release

Click here to visit our website and download the revised schedule of SPA changes

Default Retirement Age Scrapped

The Equality Act 2010 makes it unlawful for employers to discriminate against employees because of their age.  However, regulations allowed employers to set a default retirement age (i.e. force employees to stop work) at 65 or higher.  Employers could set a default retirement age below 65 but only if it was 'objectively justified'.

This default retirement age was scrapped from 1 October 2011.  Employers are now not able to compulsorily retire their employees unless the retirement can be 'objectively justified'.

Objectively justified allows an employer to set requirements that are discriminatory.  To be objectively justified, an action or rule must be a 'proportionate means' of achieving a 'legitimate aim'.  Factors an employer should take into account when deciding whether a practice or rule can be objectively justified may include:

Click here to read about the new rules in place from 1 October 2011

Changes Made To State Pension Claim System

The Pension Service, the Government agency that administers and pays the State Pension, has introduced changes to the way people on DWP benefits get their state pension.

From 10 October 2011, those on DWP benefits reaching their State Pension Age (SPA) will not have to put in a claim for their State Pension.  Instead, the Pension Service will use the data collected by other agencies and put the State Pension into payment automatically.

The Pension Service will write to individuals around four months before their SPA giving them the opportunity to opt-out of this automatic process and have their State Pension deferred instead.

The process remains unchanged for those not on DWP benefits.  They will receive their retirement pack from the DWP prior to their SPA and then have to make a claim to get the State Pension put into payment.

Click here to read more about claiming the State Pension

Significant CPI Rate Announced

The Basic State Pension (BSP) rises in April each year in-line with the rise in Consumer Price Index (CPI), as recorded in the previous September.  So, the rise to the BSP in April 2012 will be linked to the CPI rate in September 2011.

The CPI rate for September 2011 has this month been announced at 5.2%.  The full BSP from April 2012 is therefore likely to be in the region of £107.45.  The Government will announce the exact amount in due course.

Bankrupt Companies Must Give Priority To Pensions

The Court of Appeal has this month ruled that bankrupt companies must fill their pension gaps before paying other unsecured debts, upholding an earlier High Court ruling against the administrators for Lehman Brothers and Nortel Networks. The High Court had ruled that pension funds were an expense and must be paid before debts to administrators.

Click here to visit the Pensions Regulator's website and read more

Spotlight On...

We now have 11 factsheets.

Click here to visit our publications page and view all the factsheets

 Live Q&A

We hold a live online Q&A session on the second Wednesday of every month.  During the session, our experts will answer any pension related questions you may have.

The next live online question & answer session is on Wednesday 9 November 2011 between 2pm and 3pm.

Click here for further information about the Live Q&A and view previous sessions

Website Feedback

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.

Click here for further information

Become a TPAS Adviser

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

Contact Us

If you have any pension questions, please feel free to contact us by calling our helpline on 0845 601 2923, emailing or writing to us at 11 Belgrave Road, London, SW1V 1RB.

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