Pensions - Articles - Pension tax changes must be fair to all say the ACA


The Association of Consulting Actuaries (ACA) has commented that it is glad to hear that Treasury will be “reviewing how the tapered Annual Allowance supports the delivery of public services”.

 Commenting on the Statement, Karen Goldschmidt, Chair of the ACA’s Pensions Taxation Committee said: “We hope that there will be clear proposals on changes to the tapered Annual Allowance and a proper opportunity to consult on them. We also hope that any change treats public and private sector workers with DB benefits equally and fairly. 

 “The tapered AA is of course targeted at high earning individuals’ pension benefits, but it is unutterably complicated, both for the individuals impacted AND for pension schemes which carry much of the burden of trying to make the system work. The complexity is exacerbated for defined benefit schemes, like the NHS Scheme. The complexity means that in many cases the wrong tax will be paid - which is not the right way to design a tax system.

 “HM Treasury will know from the work they did in the last exploration of pension taxation launched in 2015 (which led to no clear consensus) that there is a real challenge in coming up with a method of taxing the accrual of DB pensions in a fair and practical way. We look forward to being able to feed in views.”
   

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