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The Cabinet Office has published a consultation document on proposed increases to employee contribution rates into the Principal Civil Service Pension Scheme. The increases will take effect from April 2014.

An additional document providing background and further information has also been published.

On 30 October 2013 the DWP published “Better workplace pensions: a consultation on charging”. The consultation sets out a range of measures to address pension charges in DC workplace pension schemes, aimed at protecting employees from poor pension returns due to pension charges.

The consultation seeks views on whether:

• further action is required to improve transparency and disclosure of pension charges;
• a cap on charges in default funds of DC qualifying schemes should be introduced; and
• differential charging between active and deferred members, consultancy charges and commissions should be banned in DC qualifying schemes.

Please see our Alert for further information.

The DWP has published the first official government study of the impact ofAutomatic Enrolment: Qualitative research with large employers.

The findings in this study show that the average opt-out rate so far (9%) is lower than expected. This is consistent with the level widely reported by employers and pensions providers in the media. Previous research based on individuals’ intentions indicated up to a third might opt out. This research, and other ongoing research, will aim to understand the key drivers of opt-out and the consequent effect on pension participation levels. This will continue to be monitored as part of the wider evaluation programme.

The DWP has published a consultation seeking views on the Government’s proposals for draft regulations that provide transitional, supplementary and consequential measures supporting the commencement of the new definition of money purchase benefits (section 29 of the Pensions Act 2011).

Section 29 clarified the definition of money purchase benefits following theSupreme Court judgment in Bridge.

The judgment found that, despite the possibility of a deficit arising, the following remained money purchase benefits:

• benefits subject to a guaranteed interest rate; and
• money purchase benefits which had been converted into a scheme pension.

Section 29 of the Pensions Act 2011 was therefore introduced to ensure that a benefit is only money purchase when it is calculated solely by reference to the assets.

Recognising that some schemes may have had a different understanding of money purchase benefits in the past, the draft regulations aim to:

• give schemes time to comply with section 29 and meet the necessary legal and funding requirements attached to non money purchase benefits;
• balance protection for members with minimising the impact on schemes by ensuring , in most circumstances, that past decisions do not have to be revisited;
• ensure other pensions legislation is aligned with section 29.

The consultation runs for 6 weeks until 12 December 2013. The intention is that the new definition of money purchase benefits will come into force on 6 April 2014.

Please see our Alert for further information.

The PPI has published a second and third paper in a series of briefings which aim to provide a detailed, comprehensive and independent analysis of the impact of introducing the single-tier state pension.

The PPI’s first briefing published on 17 June 2013, entitled “The impact of the Government’s single-tier state pension reform”, summarises and updates the PPI response to the Work and Pensions Select Committee pre-legislative scrutiny of the Pensions Bill.

The second paper entitled “Managing the transition between the current system and the single-tier pension”, and the third paper entitled “The impact of a switch from the triple lock to uprating by earnings”, were both published on 29 October 2013.

On 29 October 2013 the PPF published its Annual Report and Accounts for 2012 / 2013 alongside its latest funding strategy update.

The report showed a £1.8 billion surplus at the end of 2012/13 and said that, by 31 March 2013, the PPF was 87% confident of meeting its target of being financially self-sufficient by 2030.

The PPF announced on 31 October 2013 the appointment of a further nine managers to its Global Tactical Asset Allocation (GTAA) Panel. The move forms part of the PPF’s overall investment strategy to make sure that its growing £15 billion portfolio remains resilient and fit for purpose.

The proportion of the alternatives allocation to GTAA will vary over time and depend on the opportunities available in the future in both GTAA and the other alternative asset classes.

All managers were appointed following a thorough selection process. They have been appointed for four years, with the flexibility for two extensions of up to two years.