According to the head of the Inland Revenue pensions simplification review team, Peter Hopkins, they are on target to release the second consultation paper by the end of the year.
This second consultation paper was due to be published in October and there were fears that more delays would follow. Whilst Mr Hopkins admitted that the document was still being put together, he was adamant it would be released before January.
The simplification of pension legislation is apparently still on track for roll-out on 6 April 2005. According to Mr Hopkins, there will be a simplified tax regime from 2005 and schemes will have to confirm that they comply with the new simplification.
Our View
Pension simplification has been needed for years, as most consumers do not understand what they have, due to masses of jargon and legislation.
Whilst simplification is a good idea, many beneficial features of some current pension schemes could be changed and consumers need to be aware of how the simplification affects them.
One indication is that in order to simplify matters, people will have a lifetime limit, rather than an annual limit for pension contributions. Mr Hopkins also indicated that instead of the Revenue laying down the rules, they were looking for initiative on scheme design from providers.
Sounds like getting someone else to do the work if you ask us!