SPC Update 

SPC News Update - December 2004

SPC SECURES BIG IMPROVEMENTS IN PENSION SHARING ON DIVORCE DISCLOSURE

SPC has welcomed the agreement of updated versions of the Pension Information Forms used by the parties to a divorce, their advisers and the courts.

The new forms are due to be introduced in March 2005.

The key improvements from a pensions point of view are that:-

• The effective date for a pension sharing order is now crystal clear. This is the date upon which the decree absolute of divorce or annulment is made or, if later, either: -

  (a) 21 days from the date of the pension sharing order, unless an appeal has been lodged, in which case

  (b) the effective date of the order determining that appeal.

• The form now leaves no doubt that in England and Wales the only acceptable way of expressing a pension share is as a percentage of the member's cash equivalent transfer value. There have previously been suggestions that a monetary amount could be specified.

The Chairman of the SPC Administration Committee, Griff Jones, said

"These are improvements which pension practitioners have been seeking for some time. They will speed up divorce settlements and cut costs. There is no doubt that, without the involvement of representatives from SPC in drawing up the new forms, we would still be waiting. This is an excellent illustration of the progress which can be made when lawyers and specialist pension administrators bring their collective skills to bear on an issue".

FINANCIAL SERVICES AND MARKETS ACT: AUTHORISATION OF THIRD PARTY ADMINISTRATION

SPC STRATEGIC CONFERENCE

SPC held its fourth Strategic Conference at the Sofitel St James, London SW1 on November 25.

The conference provided top level analysis of the major pension issues facing UK business:

• The future for occupational pensions
• Ways to reduce risk in pension schemes
• How to work within the requirements of the new accounting regime
• The real world effect of pension funding on corporate activity
• The credit rating implications of pension financing

The conference was chaired by Sir David Miers, the SPC Chairman and the speakers were Lawrence Churchill (Chairman, Pension Protection Fund), who gave the keynote address; Richard Greenhalgh (former Chairman, Unilever UK); Kevin Gardiner (HSBC); Donald Duval (Aon Consulting); Eric Anstee (Institute of Chartered Accountants in England and Wales); Ken Edis (Edis Partnerships); David Pollard (Freshfields Bruckhaus Deringer); Andrew Campbell-Hart (Standard & Poors) and, summing up the proceedings, Robert Birmingham, the SPC President.

SPC DINNER

The keynote speaker was David Willetts, Shadow Secretary of State for Work and Pensions. Mick Duncombe - former Chief Executive of the Post Office Pension Scheme and now an independent trustee to a number of schemes gave a highly amusing response to the toasts to the guests.

The SPC President, Robert Birmingham, in his speech expressed the hope that Alan Johnson, the new Secretary of State for Work and Pensions, would turn his recent words of encouragement for the role employer's play in pension provision into action.

The President referred to deficit management as the most pressing pensions matter facing most companies with defined benefit schemes at present. He expressed the view that employers and trustees must be allowed time and leeway to manage deficits. It would, he said, be catastrophic if impending legislation forced trustees to impose intolerable funding burdens on companies. Positive encouragement, such as additional tax relief, would be a real sign that the government appreciated the role employers play in pension provision.

The President also urged policy makers to simplify the state pension system. He argued that not only is the state system so complex that even practitioners do not understand it, but it represents a barrier to saving. Why put money aside today if it means less benefit tomorrow?

With an attendance higher than in 2003, the SPC Dinner was a highly successful and enjoyable evening. Next year's dinner is on November 3rd.