We have become used to the idea that the UK Government is going to rewrite history with some time travelling pensions legislation. It told us it would be doing that back in July 2011 when it announced its intention to amend the statutory definition of money purchase benefits retrospectively. Section 29 of the Pensions Act 2011 (yes, 2011), when brought into force, will have the effect of amending that definition with retrospective effect, from 1 January 1997. But the legislation is not yet in force.
We thought we were nearly there; the new statutory definition of a money purchase benefit was due to come into force any day now. The regulations which were going to put the flesh on the bones of the skeleton which is the basic framework contained in the Act were laid before Parliament on 6 May 2014 and the Government had indicated that they would come into force in early July.
We have been getting to grips with the implications of the 81 regulations and their consequences for pension plans that provide any form of defined contribution benefits (including those offered by way of additional voluntary contributions). And we are very grateful that the Government took on board the pleas of many respondents to its consultation to reduce the impact of the retroactivity – reducing the amount of backward looking revisiting of decisions taken since 1 January 1997 which would otherwise have been necessary.
But then, on 17 June 2014, there was a minor hiccup – the regulations were withdrawn! I have never known that happen before. No doubt there is a precedent but it is surely a rare occurrence. The reason – well it would seem the incorrect Parliamentary procedure was used. Whoops! The regulations are to be replaced by two separate sets of regulations. At the time of writing the first of those has been laid but we are waiting for the second. The Government’s latest stated intention of implementation by the end of July is now starting to look increasingly ambitious.
I imagine there could be a few individuals within Government who are now wishing they really could travel in time.