Mr Neale, director at pensions technical specialist Aries Pension & Insurance Systems, said there are “huge challenges” for the industry following confirmation in the Pensions Bill of the implementation of the new single-tier pension.
He said: “This will have an impact on employers with defined benefit schemes that have remained contracted out, as they will no longer receive the benefit of National Insurance rebates; instead, they will be required to start paying standard National Insurance contributions in relation to each member.
“One might be a bit sceptical of the government’s decision to cease contracting out a year earlier than previously envisaged, as it is largely the Treasury that will benefit from receiving higher NIC rates when it stops. This could have wide-ranging implications for both the private and public sector.”
