News

National Insurance (NI) buy back deadline extended

The extension of the deadline to buy back missing National Insurance (NI) years by the government from 2006 to 2016 until 5 April 2025 is great news for individuals who had breaks in their UK career and didn't pay NI during those years.

For those who are concerned about not reaching the 35-year contribution requirement for the full State Pension, buying back qualifying years by purchasing additional credits can be a good option. This allows you to fill in the gaps in your NI record and potentially receive a higher State Pension.

It's important to note that some people may also be eligible to claim free NI credits, which can further contribute to their overall NI record. These credits are available in certain circumstances, such as when individuals are unemployed, caring for someone, or receiving certain benefits.

To determine if you have any missing NI years, visit the official government website, GOV.uk and use their online tool to check your NI record. This tool provides a comprehensive overview of your NI contributions and can show you any gaps that may need to be addressed.

By extending the deadline and providing individuals with the opportunity to buy back missing NI years, the government aims to ensure that people have a fair chance to secure a higher State Pension. Check today and take advantage of this extended deadline to help you maximise your State Pension benefits.

Power of attorney – looking after your finances and health

Have you ever considered what would happen if you were unable to manage your financial and medical affairs if you couldn't carry out everyday tasks yourself? Planning ahead is essential, especially when it comes to managing your finances and medical affairs. One effective way to prepare is by setting up a power of attorney.

A power of attorney is a legal document that gives someone the authority to make decisions on your behalf or act as your representative when you’re no longer capable of managing your own affairs.

There are two different types of power of attorney:

• One covering your financial affairs: this type allows the appointed person to handle your financial matters, such as managing your bank accounts, paying bills, and making investment decisions. They will act in your best interests and ensure that your financial affairs are properly managed.
• One covering your medical care: this type allows someone to make healthcare decisions on your behalf when you are unable to do so. They will work closely with healthcare professionals to ensure that your medical care aligns with your detailed wishes and preferences.

It's important to note that a power of attorney can only be established while you still have full mental capacity. Once set up, it will only come into effect when you are no longer able to manage your own affairs. Therefore, it's crucial to plan ahead and set up either one or both power of attorneys before you might need them.

By taking the necessary steps to establish a power of attorney, you can have peace of mind knowing that your affairs will be managed according to your wishes, if you're unable to. Planning ahead is key to ensuring that you and your loved ones are well-prepared for any future circumstances that may arise.

Unfortunately many people leave this until its too late and their families then have to apply to the Courts to manage your affairs; a long and costly process.

If you’d like more information about powers of attorney and how they can benefit you and your family, visit Age UK’s website which provides valuable resources.

Introducing Jeff Taylor, Managing Director, Yorkshire & North region - our Member-Nominated Director - July 2021

Let’s meet Jeff, our Deferred member…

Over the last 20+ years I’ve always committed to undertaking additional roles outside of my ‘day job’ in Hays. Being a member of the Trustee Board provides me with a fabulous opportunity to give a little back and also offer the unique perspective of both being a deferred member and current Hays employee. I’ve already learned an enormous amount from my colleagues and partners relating to the strategic direction of the Scheme and I bring a complementary, yet independent perspective to the Board, with a focus on the explanation of the Scheme when communicating with members.

In my spare time, I am also a Director of a Multi Academy School Trust in West Yorkshire and when time permits, I enjoy travelling with a particular preference for Spain.

Introducing Carole Hill - our Member-Nominated Director - April 2021

Let’s meet Carole, our Deferred member…

My interest in pensions was first ignited during my employment with Hays when, as a member of the HR Team, I became involved in administering employee benefits and pension scheme membership. This was the springboard for changing my career path and I seized every opportunity to develop my knowledge and widen my experience in pensions. On leaving Hays, I continued my career in benefits and pensions management roles.

When the vacancy on the Trustee Board arose, it provided an ideal opportunity for me to ‘give something back’ to a former employer and work colleagues while I continue my pension journey - this time as a Trustee of the Pension Scheme where my pension journey started. I have two key aims: firstly to ensure we communicate with members as effectively as we can, and secondly to expand and improve my investment knowledge by working alongside professionals.

In my spare time, I love walking, doing art and craftwork and crossword puzzles. My husband is also a pensioner member of the Scheme.

New pension transfer regulations give additional protection if you are thinking about transferring

To help tackle the rise in pension scams, the Government brought in new regulations in November 2021 that give an added layer of protection if you’re thinking of transferring your pension out of the Scheme and into another arrangement.

Before your transfer can go ahead, it must meet two conditions:

1. If you are considering transferring your pension into an authorised arrangement in the UK (such as a public-service pension scheme, an authorised Master Trust, an authorised Collective Defined Contribution scheme), then it is likely your transfer can go ahead.
2. If your transfer doesn’t satisfy the first condition, you’ll need to satisfy the following:
1. If the receiving arrangement is an occupational scheme, you’ll be asked to prove you have an employment link to it – for example, a letter from the sponsoring employer confirming that you meet certain requirements (length of employment, minimum salary, etc).
2. If the receiving scheme is a Qualified Registered Overseas Pension Scheme (QROPS), you’ll be asked to demonstrate you have a residential link with the scheme’s financial jurisdiction of six months or more by providing, for example, evidence of having paid local tax, a utility bill, registration with a local doctor, etc).

If (a) and (b) above are satisfied and no red or amber flags are present, your transfer can take place.

If the trustee of the scheme you’re transferring out of determine that red or amber flags are present, they can either stop or pause your transfer.

3. If one or more amber flags are present, but you can provide evidence that you’ve taken scams guidance through MoneyHelper (or that you’ve made transfers into the same receiving scheme in the previous 12 months), then your transfer can go ahead. You will still have to provide evidence that you’ve taken scams guidance from MoneyHelper, a government-backed financial-guidance provider, even if you have taken regulated advice from a financial adviser.
4. If one or more red flags are present, the trustee of the scheme you’re transferring out of will stop your transfer.

You can find more about these regulations in the Scheme’s transfer pack. Look for the ‘Option B – Take your benefits outside of the Scheme’ guide which includes detailed information about the red and amber flags.

We’ve taken the pledge to help keep your pension safe

Your Scheme administrator Equiniti, along with all of the Trustee Directors and the Pensions Manager, have taken The Pension Regulator’s pledge to help combat pension scams and protect you.

Among other things, this means we’ll:

• Regularly warn you about pension scams so you can recognise the signs;
• Report concerns about scams to the authorities and update you; and
• Follow the new transfer regulations and best practice whenever we’re asked to make a transfer.

What is responsible investment?

The Trustee believes that Environmental, Social and Governance (ESG) factors may have a material impact on investment risk and return outcomes, and that good stewardship can create and preserve value for companies and financial markets as a whole. The Trustee recognises that long-term sustainability issues, such as climate change, present both risk and opportunities that may require explicit consideration.

Here are three things the Trustee has been doing recently to further evaluate ESG issues in the context of the Scheme and its investment strategy:

1. Engagement with investment managers

Through the Investment Sub Committee, the Trustee looks to meet with each of its investment managers annually. An increasing proportion of this time is spent understanding how ESG issues are considered in the context of each investment manager’s portfolio, often with specific case studies discussed. The Trustee also wants to understand how the investment managers are taking account of such issues within their own firms.

2. Peer-group benchmarking

The Scheme’s investment performance report includes specific ESG ratings for the investment managers, which are provided by the Scheme’s investment consultant and are monitored on a quarterly basis. Once a year, the Trustee assesses how the ESG rating for each investment manager compares with the peer-group average for other investment managers in each asset class (as measured using ratings provided by the Scheme’s investment consultant). Should a rating be below the peer-group average, the Trustee will look to engage further with both the investment manager and their investment consultant to understand the reasons behind this and to consider whether any action is required.

3. Ongoing training

Over the last year the Trustee has received further training on a number of areas relating to ESG, including:

• How the Scheme’s investment consultant assesses the investment managers when assigning ESG ratings;
• Climate change implications and the evolving regulatory requirements for pension schemes; and
• How refinements could be made to further enhance the Scheme’s policy on ESG.

You can read the Trustee’s latest Statement of Investment Principles (December 2021), which includes its policy on ESG, stewardship and climate change by downloading it from the investment information section in the Document Store on the website.

Guaranteed Minimum Pension (GMP) court ruling

Since 17 May 1990, pension benefits between men and women had to be equalised. This meant that the retirement age had to be the same and for many schemes, which meant raising the retirement age to 65. There was however one element within the total pension (for many schemes) which was, by law, still payable at age 60 for females and 65 for males called the Guaranteed Minimum Pension (GMP).

On 26 October 2018, the High Court ruled that benefits between men and women need to be equalised around Guaranteed Minimum Pension (GMP) in the case of ‘Lloyds Banking Group Pensions Trustees Ltd v Lloyds Bank plc and others’

What is GMP and why was there a court ruling on it?

Back in the early 1970s, the Government decided that the Basic State Pension was inadequate for higher paid employees and introduced an additional earnings-related pension termed the State Earnings Related Pension Scheme (SERPS). This started on 6 April 1978. The additional pension was payable from age 60 for women and 65 for men at the same time as the Basic State Pension became payable.

The Government also decided that company pension schemes could instead provide this additional pension and both the employer and employees would pay lower rate National Insurance Contributions and the scheme would be contracted-out of SERPS. The additional pension in a company scheme was termed Guaranteed Minimum Pension (GMP) and was based on a member’s National Insurance contributions and a formula set by the Government.

Many pension schemes throughout the UK decided to contract-out of SERPS. However, the 2018 High Court ruled that GMPs must be equalised to remove inequalities in the GMP accrued between 17 May 1990 and 4 April 1997.

How does this affect me?

The Hays Pension Scheme and many of the pension schemes merged into it were contracted-out of SERPS during this time. The Trustee is still waiting for clarity on a number of issues following the Court ruling and once these are resolved, all affected members will be contacted.

Canada Life buy-in

The Trustee, together with Hays plc, carried out a detailed review of the insurance market last year in relation to insuring the pensions currently in payment, and in August 2018 the Trustee signed an agreement with Canada Life to insure these benefits through the purchase of a Bulk Annuity Policy.

This significant move has helped to reduce the risks facing the Scheme and has improved the security of all members.