NMPA is set to increase from age 55 to 57
The normal minimum pension age (NMPA) is the age at which most members of registered pension schemes can draw down on their pensions without incurring a tax charge for unauthorised payments. The government has recently published a consultation on the implementation of increasing the minimum pension age from 55 to 57. The Government’s rationale for this increase is the rise in life expectancy. The Government has embedded certain protections within these proposals to protect the existing scheme’s rights of members of any registered pension scheme. What this means in effect is that a member who has a right under the LGPS scheme rules at the date of consultation to access their retirement benefits at age 55 will be protected and no age increase will apply. It should be noted that the proposed date for implementation is not until 2028 and a new Government may decide to do things differently.
The Pensions Dashboard is a project by government to create a central platform that brings together details of all pension savings under one roof in order that members of the public can access information on all their pension entitlements. The Government has assessed that this will lead to more engagement by members of the public, who will be better informed and have more control and ownership of their financial planning for retirement. This will also facilitate the re-connection of users to lost pensions.
The Government announced this project in its 2016 Budget with a launch date of 2019. The timetable has shifted partly due to technical issues in relation to creating the appropriate infrastructure and digital architecture to support this program and legislative changes to ensure maximum coverage. The new tentative timeline is 2023 for implementation of the Pension Dashboard.
Investment Strategy Update
The 2019 actuarial valuation was completed in March 2020 and as part of the process the investment strategy was reviewed to determine the risk and return parameters that could deliver the long-term investment target return, to maintain affordability and pay our pensioners. The existing strategic asset allocation was amended. Post March 2020, the Covid 19 pandemic had an adverse impact on economic outlook and as such, the asset allocation was stress tested to ensure it was still suitable.
The main changes are the addition of private debt and multi asset credit asset classes and the removal of diversified growth and corporate bonds.
Read more information in the Pension Fund ISS Dec20 document.