Pensions-related legislation, such as simplification, the Pensions Act 2004 and age discrimination legislation, is not perceived as beneficial either for schemes or for the pensions industry by a large number of occupational plans.
According to Capita Hartshead’s 14th Annual Pension Scheme Administration Survey 2007, less than a third of occupational schemes believe such legislation has been beneficial. And none said that the implementation of the Pensions Act 2004 and the Finance Act 2004 legislation had improved member take-up.
Just 12% felt it had provided the scheme with a more confident future and close to seven out of 10 schemes did not believe the changes have even improved the financial security of the scheme.
The survey also found that 94% of schemes have allowed members to maximise the tax-free cash permitted by HM Revenue and Customs in the form of a 25% lump sun benefit.
Mike Addenbrooke, managing director at Capita Hartshead, said: “For legislation designed to make pensions simpler, more flexible and, therefore, a more attractive saving option, this is a disappointing result – especially given the huge cost. Indeed, large schemes have had a median spend of £150K this year on implementing simplification changes.”