Editorial: Happy new year! It started with a bang – a stock market slump, circuit breakers suspending trading in China, China suspending the circuit breakers, and the FTSE falling sharply on Monday and Thursday last week.
Against this backdrop, the chancellor told UK business leaders that a ‘dangerous cocktail’ of threats to the economy persists, although his metaphor did not reveal who mixed it.
While we have recently had the lowest unemployment figures in a long time come through – at 5.2 per cent, the August to October 2015 rate was 0.8 per cent below the previous year’s – other factors look less certain. Inflation, for example, is still at rock bottom along with interest rates, manufacturing has slowed and GDP growth has just been revised down.
The economy and regulatory change are expected to make it tough for pension schemes to get on top of all the challenges the year has in store – and they’re just the ones we know about. One thing is clear: it will be a year of many firsts.
Auto-enrolment is being rolled out to hundreds of thousands of small employers. Nobody can say for sure how it’s going to go; the regulator has just lifted a warning finger to remind employers of their duties, but for small and micro businesses, even people employing a nanny, this will likely be the first time they have had to deal with staff pensions.
Chairs of defined contribution schemes will publish their first reports in February, and in April, the new independent governance committees for contract-based schemes will for the first time report on value for money.
The list of firsts continues in the defined benefit space. Further steps to create £25bn-plus asset pools in the Local Government Pension Scheme will be made this year, and the introduction on January 1 of Solvency II could mean those schemes wishing to close a buy-in deal for deferred members will have to pay a higher premium.
Reductions in the lifetime allowance, a tapered annual allowance and the end of contracting out will also keep many busy.
As if that wasn't enough, the state pension overhaul keeps making headlines. MPs have now backed women born in the 1950s whose state pension age was moved from 60 to 65 and then 66, after concerns that they were not notified in time and unable to prepare adequately for retirement.
There is plenty to get on with. Pensions Expert wishes you a productive and, for the second time, happy new year!
Sandra Wolf is deputy editor at Pensions Expert. You can follow her on Twitter @SandraCWK and the team @pensions_expert
