Pensions Reform – More Proposals

In July this year, Chris Lewin and Ed Sweeney published an independent report which looked at the de-regulation of pensions legislation. The Government has now published its response to the report together with several recommendations for reform.

The key proposals on which the Government is seeking views are:

• reducing the cap on revaluation of deferred benefits (in relation to future service benefits) from 5% to 2.5%;

• introducing a statutory override to enable schemes to amend their scheme rules to reflect the reduction of the cap on LPI from 5% to 2.5% which was introduced in April 2005. There would be a similar override to deal with the proposed changes to revaluation.

The Government is also seeking views on whether it would be appropriate to introduce legislation to deal with certain types of risk sharing scheme and to allow them greater flexibility in certain areas. The types of scheme they are talking about are where, for example, members would accrue benefits on a