The Government has set the April 2016 start date for state pension reform in statute and confirmed 35 qualifying years will be needed to access the full state pension.
In the state pension reform bill, published today, the Government bowed to the work and pensions select committee’s recommendation to create greater certainty around reforms.
Pensions minister Steve Webb has previously argued against putting the start date in the bill in case an unforseen event, such as EU regulation, forces a delay.
The Government came under criticism in March for bringing forward the start date from April 2017. The NAPF warned against “rushing through” reforms and the WPSC said it showed a “cavalier” approach to reforms.
The bill also sets out the number of qualifying years for full state pension will be 35 years and confirms plans, announced in the Budget, to enable employers of contracted-out schemes to pass on the costs of falling national insurance contributions through future member accruals or contributions. The power will be available for five years and not for public sector pension schemes.
WPSC chair Dame Anne Begg says: “I am pleased that the Government has accepted two of the committee’s key recommendations: that both the implementation date for introducing the single-tier state pension and the minimum number of qualifying years required, are set out on the face of the Bill. This will help provide the clarity and certainty so vitally needed by the public, the pensions industry and employers.”
“Central to the success of the reforms is that people understand how they will be affected by the changes. We also welcome, therefore, the Government’s recognition of how crucial it is for it to have an effective communications strategy in place at an early stage.”