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B124 - Pensions Bill 2009

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    Pensions Bill 2009 (Indievertigo)

    Part 1 created by !Laxy! (Former Green Party Leader) in V3.
    Parts 2 and 3 created by John82, Former shadow Secretary of State for Work and Pensions in V13. Part 3 (3) created by Indievertigo MP
    Part 4 created by Rt Hon Alasdair MP in V68.
    Part 5 created by Rt Hon Indievertigo MP in this bill

    Unless otherwise stated, acts which this bill includes have not been amended.

    A bill amalgamating current pensions acts for the purposes of reducing bueraucracy and enabling easier understanding of pensions policies of the TSR Government, increasing retirement age to 65 bringing us in line with other western countries, and creating an incentive to work beyond retirement age.

    - Rewording and amalgamation of V3, V13, V15 and V68
    - Ammendment of V3 due to vague definitions and unfeasible proposals
    - Ammendment of V13 to increase retirement age to 65.
    - Ammendment of V13 to allow citizens to work beyond 65.


    BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-

    1. Abolition of tax relief for private pensions contributions.

    (1) No tax relief is given on private pensions contributions.
    (2) All proceeds go directly into payment of basic Citizen's pension.

    2. Citizen's pension

    (1) All persons aged 65 and over are eligible for the Citizen's pension.
    (a) Any person may choose to work beyond age 65.
    (2) Those born between April 1st 1949 and March 31st 1950 will be eligible for the Citizen’s Pension when they reach the age of 61.
    •Those born between April 1st 1950 and March 31st 1951 will be eligible for the Citizen’s Pension when they reach the age of 62.
    •Those born between April 1st 1951 and March 31st 1952 will be eligible for the Citizen’s Pension when they reach the age of 63.
    •Those born on or after 1st April 1952 will be eligible for the Citizen’s Pension when they reach the age of 64
    •Those born on or after 1st April 1953 will be eligible for the Citizen’s Pension when they reach the age of 65 (this includes those who are currently not eligible for the Citizen's Pension until the age of 65)

    3. Distribution of savings made by this Act
    (1) £1430m used to reduce council tax payments for those over 65.
    (2) Remainder of savings due to clause 2 used to cover the predicted future pensions shortfall.
    (3) All other savings are submitted to the Treasury for the chancellor of the exchequer to use.

    4. Foreign enlistment

    (1) All persons of non-British citizenship who have served for at least one year in any capacity in the British Armed Forces shall have indefinite leave to remain in the UK.
    (a) Should these persons choose to exercise their right to become resident in the UK, they shall be eligible to the same level of pension as though they were a British citizen
    (i) This entitlement shall last as long as they remain resident in the UK

    (2) All persons of non-British citizenship who have served for at least one day in action in the British Armed Forces shall have indefinite leave to remain in the UK.
    (a) Should these persons choose to exercise their right to become resident in the UK, they shall be eligible to the same level of pension as though they were a British citizen
    (i) This entitlement shall last as long as they remain resident in the UK

    5. Incentives to work

    (1) Any citizen is permitted to work beyond age 65 should they so wish.
    (2) No payment of citizens pension will be made to those choosing to work past the retirement age.
    (a) A payment of 25% of the annual citizen's pension will be made in a single lump sum, or spread quarterly. Citizen may choose which method he/she will receive payment.
    (i) This payment will be given every year the citizen chooses to work past retirement age.
    (ii) A citizen retiring, then returning to work will be entitled to this payment and to all other incentives to work mentioned in this Act, but not to the citizen's pension.
    (3) Income tax will be reduced by 20% of original applicable rate at age 65, annually up to a maximum of 80% reduction in income tax rate.

    Commencement, short title and extent

    (1) From the date this act is passed, the previous pensions Acts V3, V13, V16 and V68 are abolished.

    (1) This Act may be cited as the Pensions Act 2009.

    (2) This Act commences immediately.
    (a) From the date this act is passed, the previous pensions Acts V3, V13, V16 and V68 are abolished.
    (4) This Act extends to England, Scotland, Wales and Northern Ireland, and all persons defined by 4.1 and 4.2.
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    Interesting bill. Not least because it is referring back to so many previous bills about pensions.
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    I'm way too hungover to properly scrutinise this at the minute, but why the relegislating on stuff we've already passed? :confused:
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    Havn't looked into it properly, but it seems more like codification with a few changes, would this be correct?
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    (Original post by Alasdair)
    I'm way too hungover to properly scrutinise this at the minute, but why the relegislating on stuff we've already passed? :confused:
    Its to keep everything in one one Act, rather than confusing the system with several Pension acts.
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    (Original post by Matthew_Lowson)
    Its to keep everything in one one Act, rather than confusing the system with several Pension acts.
    (Original post by DayneD89)
    Havn't looked into it properly, but it seems more like codification with a few changes, would this be correct?

    Pretty much this Alasdair and Dayne, when I was appointed to the DWP, I looked at the pensions acts to see what we had, and it struck me that it would be much simpler to have them all as one Act. V3 isn't the easiest bill to understand as well:p:

    The new part of the bill is part 5, which creates incentives to remain in employment.

    I'm open to amendments on the previous bills I've amalgamated into it, but for the first reading I didn't want to appear too radical.
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    Couple of technicalities:

    I presume Citizens pensions = State pension. If so, 5(a) makes no sense and why should it be paid quarterly?

    Secondly, 5(3) should be in your Taxation Bill, yes?
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    (Original post by Metrobeans)
    Couple of technicalities:

    I presume Citizens pensions = State pension. If so, 5(a) makes no sense and why should it be paid quarterly?

    Secondly, 4(3) should be in your Taxation Bill, yes?
    maybe because I'm tired or something, but I dont see a 4(3). Stupid mistake (on my part) or typo?
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    (Original post by DayneD89)
    maybe because I'm tired or something, but I dont see a 4(3). Stupid mistake (on my part) or typo?
    It's a typo, it should read 5(3). Upon re-reading, I object to almost all of section 5.
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    (Original post by Metrobeans)
    Couple of technicalities:

    I presume Citizens pensions = State pension. If so, 5(a) makes no sense and why should it be paid quarterly?

    Secondly, 5(3) should be in your Taxation Bill, yes?
    You presume correctly. 5a is simply an extra incentive to remain in employment -I wouldn't expect people to remain working beyond 65 and not receive extra incentive, so 5a is merely an incentive. If you have a problem with how it is paid, I'm quite happy to amend the bill.

    This is a PMB, not a Tory bill - it has nothing to do with the taxation bill.
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    My understanding is that currently if you work past 65, you receive full state pension? So this isn't so much an incentive as a cut?
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    (Original post by Alasdair)
    My understanding is that currently if you work past 65, you receive full state pension? So this isn't so much an incentive as a cut?
    Ah, I wasn't aware of that, I thought it wasn't payable if someone worked after 65.

    The genuine intention was an incentive, so I can change the wording to allow for an additional payment of 25% the annual pension, payable in a lump sum, quarterly or weekly.
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    (Original post by Indievertigo)
    The genuine intention was an incentive, so I can change the wording to allow for an additional payment of 25% the annual pension, payable in a lump sum, quarterly or weekly.
    I don't think any of that's neccessary - I think the tax cut would do. You're still incentivising people to work beyond 65 in a simple manner.
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    (Original post by DanGrover)
    I don't think any of that's neccessary - I think the tax cut would do. You're still incentivising people to work beyond 65 in a simple manner.
    Exactly. Its a good bill - why should you have to stop working at 65 if you don't want to. Incentivising it is good too, as overall it will probably benefit the economy.
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    (Original post by Indievertigo)
    Ah, I wasn't aware of that, I thought it wasn't payable if someone worked after 65.

    The genuine intention was an incentive, so I can change the wording to allow for an additional payment of 25% the annual pension, payable in a lump sum, quarterly or weekly.
    To be perfectly honest, I'm not 100% sure. I'd have to check.
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    I think you still get it, but it's counted as income and is taxable, though I suppose the tax cuts counter that out.
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    (Original post by Metrobeans)
    It's a typo, it should read 5(3). Upon re-reading, I object to almost all of section 5.
    Care to say what part you object to and why?

    Section 5(2) will be removed.
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    It's not clear to me what this is actually changing (could that be summarised?) but I'm not keen on it as it stands. Clause 1 is a massive disincentive to private pension saving. In fact, nobody acting rationally would save into a pension at all without tax breaks. Since you can't easily get money back out of a pension pot, logically you put it into savings/investments (identical in terms of returns, with no tax breaks) which allow you to get at it should you need to.

    If you want to ensure everyone has a state pension sufficient to live on, great - but fund it through general taxation, so people still benefit from doing their own retirement saving and aren't pushed into reliance on the state.
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    (Original post by ThePants999)
    It's not clear to me what this is actually changing (could that be summarised?) but I'm not keen on it as it stands. Clause 1 is a massive disincentive to private pension saving. In fact, nobody acting rationally would save into a pension at all without tax breaks. Since you can't easily get money back out of a pension pot, logically you put it into savings/investments (identical in terms of returns, with no tax breaks) which allow you to get at it should you need to.

    If you want to ensure everyone has a state pension sufficient to live on, great - but fund it through general taxation, so people still benefit from doing their own retirement saving and aren't pushed into reliance on the state.
    Clause 1 is already an act passed by this house.

    The new part of this bill is the incentive to work beyond retirement age, regarding income tax.(5.3)
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    (Original post by Indievertigo)
    Care to say what part you object to and why?

    Section 5(2) will be removed.
    That was the main part I objected to. The rest of that section is fine. However, do you think another incentive is necessary for people whose incomes are within the personal allowance for income tax? This becomes especially relevant if the Conservatives bill passes.
Updated: February 7, 2009
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