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UK roundup: The Pensions Regulator, Hewitt, John Lewis Pension Fund

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  • UK roundup: The Pensions Regulator, Hewitt, John Lewis Pension Fund

UK - The Pensions Regulator today released its annual report and accounts, outlining all actions it has taken over the last year, while Hewitt urged employers to prepare for the changes to pension taxation before a final legislation was drawn up and John Lewis Pension Fund significantly reduced its stake in online retailer Ocado.

Suspension of scheme trustees due to whistleblowing has safeguarded more than £31m (€36m) in assets, the UK Pensions Regulator (TPR) claimed in its annual report for 2009-10.

Further, the regulator took action and suspended trustees from more than 100 defined contribution (DC) schemes in the last year.

Working together with the Serious Fraud Office, HM Revenue and the Financial Services Authority, it also recovered £35m of misappropriated scheme funds.

Chairman David Norgrove said the last two years had seen huge pressures on private pensions.

He said: "Trustees and employers have had to work more closely than ever to secure member benefits while allowing employers to play their part in the recovery."

Acting chief executive Bill Galvin added that TPR's busiest time was yet to come.

"We are also focusing on risks faced by DC schemes, which will be the vehicle into which most new members will be auto-enrolled, and will be setting out our thinking in more detail later in the year," he said.

Meanwhile, UK employers would like to see the new pension tax regime delayed by a year to allow more time to prepare, a survey by Hewitt has found.

The consultancy is urging companies to start planning for changes to the way pension savings are taxed, which will see an annual allowance of £30,000-45,000 and all further savings likely to be taxed at 40% or more.

While final legislation is only due later this year, the government plans to implement the new rules by April 2011, meaning employers only have nine months to prepare.

Tony Baily, a principal consultant at the company, said Hewitt welcomed the simpler tax system for pensions, but that there was still "significant uncertainty" about exact measures.

"However, in this case, employers cannot afford to wait for the full details," he said, adding that he did not expect the government to delay the new rules, as it needed the estimated £3.5bn the tax would raise.

Baily said: "Next April will come around very quickly, so companies must take steps now to understand the potential outcomes and how they will need to restructure their benefits to offer best value for their employees."

A survey conducted earlier this year by the company found that 85% of employee benefit managers from major UK companies were in favour of postponing the new rules by a year.


Lastly, the pension fund for high street store John Lewis has announced it cut its stake in online retailer Ocado by more than two-thirds.

Ocado was forced to cut its IPO price from 200-275p to 180-200p on Tuesday and is currently trading at 160p, a 7% drop since markets opened this morning.

John Lewis Pension Fund has held a 26.5% stake in the company since 2008 after it was transferred from John Lewis Partnership to the fund, but has now reduced its holding to just 10%.

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