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Govt rethinks Pensions Act to cut the red tape

The Government is set to overhaul the Pensions Act 1995 just a year after it came into force in a bid to cut red tape for pension schemes and advisers.

The Department of Social Security is rolling out a major consultation paper on the Pensions Act, hoping to make it easier and simpler to set up and run a pension scheme.

Since its inception in April last year, pension experts have criticised the Act for placing massive admin burdens on advisers and trustees.

The DSS is likely to focus on three areas which have come under fierce attack from IFAs, schemes and trustees.

The new regime could see rules relaxed for wholly insured schemes, such as executive personal pensions and contracted-out money purchase schemes.

The DSS is also believed to be keen to simplify the contracting-out process and to simplify rules for schemes where all the members are trustees.

Scottish Equitable pensions development manager Steven Cameron says: "The Pensions Act can be improved and it is good to see the Government is looking at how."

In a speech in London last week, pensions minister John Denham said: "Over the next few months, we will be consulting widely on provisions for making the Pensions Act easier to operate by simplifying a number of its requirements."

The move comes as the National Association of Pension Funds opens its campaign to simplify pensions law.

The NAPF believes that one of the main deterrents to people taking a pension is the confusion surrounding the law.

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