Minimum contribution requirements apply where a UK employer intends to use its own defined contribution pension scheme to comply with new automatic enrolment duties under the Pensions Act 2008. These are being phased in over two transitional periods spanning six years. The date from which the next two increases in contribution levels apply has been extended by six months. The alignment of the increases to the start of the tax year is intended to "simplify the administration of automatic enrolment for the smallest employers in particular" (Autumn Statement 2015, paragraph 1.137).

The new deadlines are as follows:

The 2015 Autumn Statement and Spending Review: policy costings document confirms that there will be a saving of £840 million to the Exchequer due to tax relief not being applied to these mandatory contributions (Policy costings document, page 39).

This is the second delay to the phasing-in requirements. The overall transitional period was originally intended to be one year shorter, but on 25 January 2012 the then pensions minister Steve Webb announced in a written ministerial statement that the start of the second transitional period would be delayed for a year (from 1 October 2016 to 1 October 2017), with the end of the period delayed for a further year in consequence, see Legal update, DWP releases revised timetable for auto-enrolment staging dates.

For more information on auto-enrolment, see Practice note, Auto-enrolment: overview.

The 2015 Autumn Statement and Spending Review reaffirms the government's commitment to the "triple lock" on increases to the basic state pension that was introduced in the last Parliament (Autumn Statement 2015, paragraph 1.133). Under the "triple lock" system, the state pension increases by the highest of the rise in average UK earnings, the rise in inflation (measured by the Consumer Prices Index (CPI)) and 2.5%. The government has previously committed to maintaining the "triple lock" until at least 2020.

The immediate effect of this is that the basic state pension will increase to £119.30 per week from 6 April 2016 in line with the triple lock (Autumn Statement 2015, paragraph 3.48).

The Office for Budget Responsibility estimated in June 2015 that the triple lock had cost £2.9 billion in 2014/15, however, a retracted Government Actuary's Department report published in October 2015 estimated the figure at £6 billion (see Pensions news round-up for the week to 15 October 2015: GAD gauges state pension triple lock cost at £6 billion a year).

The new single-tier state pension, which comes into effect from 6 April 2016, will be set at £155.65. This coincides with the end of the current system of contracting out of the state second pension.

The 2015 Autumn Statement and Spending Review confirms that following the introduction of the single-tier pension from 6 April 2016, legislation will be introduced to "enable the pension tax rules on bridging pensions to be aligned with Department for Work and Pensions legislation" in the Finance Bill 2016 (Autumn Statement 2015, paragraph 3.28). No further guidance on this point is provided, however, it is possible that this means that the Finance Act 2004 rules on bridging pensions will be amended to reflect the introduction of the new single-tier state pension from April 2016, and will allow schemes to amend their rules to reflect the new regime.

For more information on contracting out, see Practice note, Contracting out of the state second pension: overview.

In the July 2015 Budget the government confirmed that it would "actively monitor the growth of salary sacrifice schemes that reduce employment taxes and their effect on tax receipts". This obviously remains a contentious area as the 2015 Autumn Statement and Spending Review confirms that the government remains "concerned" about the growth of the use of salary sacrifice. The government is considering what action is needed, and will "gather further evidence, including from employers, on salary sacrifice arrangements to inform its approach" (Autumn Statement 2015, paragraph 3.25). For more information on salary sacrifice, see Practice note, Salary sacrifice arrangements: Salary sacrifice and enhanced employer contributions to registered pension schemes.

In the July 2015 Budget the government launched a consultation on the system of pensions tax relief. HM Treasury is consulting on whether to make fundamental reforms to current system, perhaps moving from the current "EET" system, whereby contributions and investment income receive tax relief but pensions are taxed, to a "TEE" system (with a government top-up) where pension payments would be tax-free. The government has confirmed it will publish its response at the Budget 2016 (Autumn Statement 2015, paragraph 3.26). For more information, see Legal update, July 2015 Budget: key pensions announcements.

In the March 2015 Budget the government announced proposals to allow individuals to assign their annuity income stream to a third-party buyer in exchange for a lump sum or an alternative retirement product, provided the original annuity provider agrees to the transaction. A call for evidence on the proposals closed on 18 June 2015, and the 2015 Autumn Statement and Spending Review confirms that the government will publish a formal response in December 2015 with legislation expected in the Finance Bill 2017 (Autumn Statement 2015, paragraph 3.30). For more information, see Legal update, July 2015 Budget: key pensions announcements.

Currently a limit applies on the amount of a dependant's scheme pension that may be provided where the scheme member died after 5 April 2006 and had reached age 75, and at the time of death the member was actually receiving one or more scheme pensions under the scheme, or was prospectively entitled to receive them. The dependant's scheme pension cannot exceed the amount of the member's scheme pension and remain an authorised member payment. For more information, see Practice note, Pensions tax: authorised pension payments: Dependants' scheme pension.

Legislation will be introduced with the Finance Bill 2016 to simplify the test that takes place when a dependant's scheme pension is payable. (Autumn Statement 2015, paragraph 3.27).

In June 2015 HMRC confirmed that it planned to issue guidance about the application of inheritance tax (IHT) to drawdown pensions following pensions industry concerns about the risk that IHT might arise on unused drawdown funds. This meant that if a member died leaving funds designated for flexi-access drawdown that have not been withdrawn, it was possible that the unused drawdown funds may be subject to IHT on the member's death. For more information, see Practice note, Inheritance tax and pension flexibility: overview: Omissions and drawdown.

The 2015 Autumn Statement and Spending Review confirms that the government will legislate to prevent such a charge arising, and that this will be backdated to apply to deaths on or after 6 April 2011. Although HMRC originally stated this would be done through guidance, the government's intention is expected to be reflected in the Finance Bill 2016 (Autumn Statement 2015, paragraph 3.36).

On 5 October 2015 the Chancellor of the Exchequer announced plans to pool the 89 local authority pension funds of the Local Government Pension Scheme (LGPS) in England and Wales into "half a dozen" British Wealth Funds in order to "invest billions in the infrastructure of their regions", see Pensions news round-up for the week to 8 October 2015: LGPS funds to be reduced to six "wealth funds" to invest in infrastructure.

In the 2015 Autumn Statement and Spending Review the government invited administering authorities to produce proposals for new pooled structures in line with the existing broad guidance to significantly reduce costs while maintaining overall investment performance. As part of this announcement, the Department for Communities and Local Government published Local government pension scheme: investment reform criteria and guidance to assist administering authorities develop their proposals. (Autumn Statement 2015, paragraph 1.138.)