Early exit charges for contract-based personal pensions, including workplace personal pensions, will be capped at 1% from 31 March, as introduced by the Financial Conduct Authority (FCA). Early exit charges that are currently set at less than 1% may not be increased and firms will not be able to apply an early exit charge to personal pension contracts entered into after these rules take effect.

From April, the pensions MPAA is set to be cut from £10,00 to £4,000 a year. The pension flexibilities introrduced in April 2015 allowed individuals to access defined contribution pensions how and when they wanted to best suit their needs. The MPAA restricts tax-relieved contributions to a pension when a person has already accessed their pension but wish to make furthur payments.

The reduction on the MPAA will limit the extent to which people, who have already accessed their pension savings, can put this cash back into pensions and therefore benefit from tax relief a second time.

The Treasury has predicted that this reduction will affect fewer than 3% of individuals however, the cut has received a lot of criticism with claims that it could discourage people from saving into their pensions when they are still a long way from retirement.

Yvonne Braun, director of policy, long-term savings and protection at the Association of British Insurers (ABI), said: 'Reducing the incentives for people to save for their retirement should not be contemplated lightly. People who have used the pension freedoms as intended will be penalised by this change for saving further for their retirement.

'At a time when we are encouraging people to work for longer and to save for their retirement through auto-enrolment, it seems contradictory and counterproductive to limit their options to do so through a reduction in the MPAA. It is too early to judge the effects of the pensions freedoms in this area, so we are asking the Government to delay its decision until enough evidence becomes available.'

The 5 April marks the final day for trustees to pass a resolution to avoid having to provide an underpin for members who ceased contracted-out employment on 6 April 2016, but continued in pensionable service.

By passing resolution before the 6 April, trustees are able to modify the scheme to revalue the earnings factors or ‘where the scheme contains a rule or provision that would require or permit the increases to be applied to an earner whose service in contracted-out employment ceased on the second abolition date with effect from a relevant year before the last service tax year, disapplying that rule or provision to the extent that it does not require or permit such increases.’

On 6 March, the Pension Protection Fund’s (PPF) consultation on a levy rule for pension schemes without a substantive sponsor closes, with the PPF expecting to publish its finalised rules on 31 March.

The consultation proposes to introduce a levy to schemes that continue to run without a substantive sponsor under the terms of an ongoing governance arrangement, despite separating from its sponsoring employer.

Without a genuine sponsor the scheme’s investment strategy is at risk of failing. The PPF does not expect the levy to be wide reaching with the possibility of no schemes charged in 2017/18, however believe it is important to introduce the rule in case it is needed, rather than risk an effective cross-subsidy from existing levy payers.

Further information on 2017/18 Consultation on a levy rule for schemes without a substantive sponsor is available here. 

Furthur information on Amendment of the Occupational Pension Schemes (Modification of Schemes) Regulations 2006 is available here.