Gaurav Gupta’s Post

Public service personnel and elected officials must be eligible for only a single pension benefit, not for each and every position they have held. This is a pure waste of taxpayers' money. Because the wise use of taxpayers' money is critical to ensuring that citizens come forward to pay taxes. Elaboration: ## The Case for Single Pension Benefits for Public Service Personnel and Elected Officials The issue of pension benefits for public service personnel and elected officials is a significant topic in public finance and governance. Your point about limiting pension eligibility to a single benefit per individual is a compelling argument that raises several important considerations. ### The Financial Implications 1. **Cost Efficiency**: Allowing multiple pensions for various positions can lead to excessive financial burdens on taxpayers. By limiting benefits to a single pension, governments could potentially save millions, which could be redirected to essential services such as education, healthcare, and infrastructure. 2. **Sustainability of Pension Funds**: Many public pension systems are underfunded. By capping pension benefits, states and municipalities could improve the sustainability of these funds, ensuring that they can meet their obligations without overextending financial resources. ### Encouraging Responsible Governance 1. **Public Trust**: Taxpayers are more likely to support public funding when they see responsible management of resources. Limiting pension benefits can enhance public trust in government institutions, as it demonstrates a commitment to fiscal responsibility. 2. **Equity Among Employees**: A single pension benefit policy would create a more equitable system among public employees. It would ensure that all individuals are treated fairly, regardless of the number of positions they have held, thus promoting a sense of justice within the public service sector. ### Potential Challenges 1. **Retention of Talent**: Critics might argue that limiting pension benefits could deter talented individuals from pursuing careers in public service or running for office. To counter this, governments could explore alternative incentives, such as competitive salaries or professional development opportunities. 2. **Transitioning Existing Systems**: Implementing a single pension benefit policy would require careful planning and a transition period for current employees and officials. This could involve negotiations with unions and stakeholders to ensure a fair approach. ### Conclusion The proposal to limit public service personnel and elected officials to a single pension benefit is a thought-provoking solution to enhance the wise use of taxpayers' money. By addressing the financial implications, promoting responsible governance, and considering potential challenges, policymakers can create a more sustainable and equitable system that ultimately benefits all citizens.

𝗟𝗶𝗳𝗲𝘁𝗶𝗺𝗲 𝗔𝗹𝗹𝗼𝘄𝗮𝗻𝗰𝗲 𝗥𝗜𝗣(𝗶𝘀𝗵) 🪦 On 6 April 2024 the pension lifetime allowance (LTA) officially disappeared. 𝗛𝗼𝘄𝗲𝘃𝗲𝗿… The abolition did not go quite to plan. Two days before the allowance’s demise, HMRC issued a newsletter saying that ‘there would be further minor technical changes made through a second set of regulations’ without specifying when regulatory round two would happen. To many the hiccup did not come as a surprise. From the moment that the Chancellor announced he would abolish the LTA in less than thirteen months, there was considerable scepticism that such an ambitious timetable could be achieved. 𝗜𝗻 𝗽𝗿𝗮𝗰𝘁𝗶𝗰𝗲… HMRC’s newsletter says ‘…schemes should ensure that members are aware of the need for further legislative changes. As a result, members may need to wait until the regulations are in place before taking or transferring certain benefits. This is to ensure that their available allowances and tax position do not need to be revisited later in the year.’ Fortunately the ‘certain benefits’ mentioned are a small, esoteric, mix, so if you are drawing benefits or making a transfer, you may not have to wait for the new regulations to arrive. 𝗧𝗵𝗲 𝗹𝗼𝗻𝗴 𝘀𝗵𝗮𝗱𝗼𝘄 𝗼𝗳 𝘁𝗵𝗲 𝗟𝗧𝗔 𝗿𝗲𝗺𝗮𝗶𝗻𝘀 While the letter of the law and regulation is that the LTA is no more, its ghost is still to be found haunting pension legislation. For example: ➡️ The normal maximum total lump sum that you can draw free of tax remains at £268,275. That just happens to be 25% of the old standard LTA of £1,073,100. ➡️ The normal maximum lump sum death benefit that can be paid free of tax on death before age 75 is £1,073,100 – the old LTA again. ➡️ Both lump sum figures may be higher if you have any of the various transitional protections dating back as far as 2006. All those protections revolve around the appropriate LTA at the time they were introduced. The corollary is that you cannot now forget about any LTA protection you have, even though the LTA has disappeared from the statute books. As ever, if you have any form of protection, do not take any action without first seeking advice. 𝗪𝗶𝗹𝗹 𝗶𝘁 𝗮𝗹𝗹 𝗰𝗵𝗮𝗻𝗴𝗲 𝗯𝗮𝗰𝗸 𝗮𝗴𝗮𝗶𝗻? When Jeremy Hunt announced, in March 2023, that the LTA would be culled, the Shadow Chancellor, Rachel Reeves, said that a Labour government would reinstate it. This remains the party’s position, although some pension experts believe that realpolitik will mean the pledge ends up having a low or no priority. If nothing else, the huge effort that has gone into not quite legislating to kill the LTA in 13 months is a disincentive to revisit the subject. 

Budget 2024 National Pension Scheme: Govt may announce steps to promote, make NPS more attractive Pension fund regulator PFRDA has sought "parity" with Employees' Provident Fund Office (EPFO) on the taxation front for contributions by employers and some announcements in this regard are expected to be made in the interim Budget. Govt may announce steps to promote, make NPS more attractive The government may make the National Pension System (NPS) more attractive by extending tax concessions on contributions and withdrawals especially for senior citizens above 75 years. Pension fund regulator PFRDA has sought "parity" with Employees' Provident Fund Office (EPFO) on the taxation front for contributions by employers and some announcements in this regard are expected to be made in the interim Budget. Finance Minister Nirmala Sitharaman is expected to present the interim Budget on February 1. This is going to be her sixth Budget. At present, there is a disparity in the employers' contributions in building corpus for the employees, wherein contributions up to 10 per cent of basic salary and dearness allowances by a corporate are exempt from tax for NPS contributions, while the same is 12 per cent in the case of EPFO. To promote long-term savings through NPS and reduce the tax burdens for senior citizens above 75 years, the annuity portion of the NPS should be made tax free for the holders from the age of 75 years, according to Deloitte Budget expectations. Moreover, NPS can be included along with interest and pension to ensure that senior citizens above 75 years of age do not have to file returns if they have NPS proceeds, it said. RELATED STORIES Union Budget 2024: FM Sitharaman to present fourth paperless budget on February 1 Union Budget 2024: Finance Bill to fiscal deficit, key terms you should know Expect lower personal income tax; reconsideration of capital gains tax regime for fixed income: Bala... At present the lump-sum withdrawal of 60 per cent is tax free.

🚨 Pension News: Governor Pritzker Unveils New Budget...with pension funding updates... "Pritzker’s budget team is also aiming to hasten the state’s pension funding ramp with an eye toward landing another credit upgrade from Wall Street ratings agencies. Since 1994, the state has been on a slog toward filling the gap in the grossly underfunded system to 90% by 2045. Pritzker’s team is adjusting that goal to reach 100% funding by 2048 — closer to pension goals set by many other states. Pritzker will need legislative approval for the pension proposal." https://loom.ly/SIqc0F4

One of Illinois's biggest challenge for long term economic growth and prosperity are the state's large pension obligations. Anything that increases this challenge instead of structurally addressing it is a serious threat to the future to all of us living here. That is why it's so important to solve the legal challenges around Tier 2 of our pension system in a way that satisfies the legal requirements to be compliant but minimizes any increased financial obligations for the state, and therefore for all of us tax payers. Today's Chicago Tribune OpEd by Derek R. B. Douglas from the Civic Committee of the Commercial Club of Chicago, Joe Ferguson from the Civic Federation, and David Greising from the Better Government Association makes a persuasive argument to fix the Tier 2 safe-harbor problem while ensuring the state’s pension plans remain compliant with federal regulations. The state already faces $142 billion in unfunded pension liabilities which makes the recommended approach by these three organization and supported by Governor JB Pritzker even more important. Changing the Tier 2 pay cap to match the Social Security wage base for the three largest state pension plans would add about $12 billion to the state’s 2045 pension liability and require about $7 billion in additional state pension contributions through 2045. But this measure to be legally compliant will be considerably less than alternative proposals under consideration by the legislature -including bringing Tier 2 benefits entirely up to the level of Tier 1 — at a cost to taxpayers that the OpEd estimates at $82 billion through 2045. Let's be financially smart and responsible instead of creating unacceptable burdens for future generations and their opportunity for economic well-being.

A single Pension Age claimant on Universal Credit - impossible? Not any more! A new set of Regulations has been released looking at Managed Migration for pension age claimants - and I'm glad because I'm delivering a workshop on it at our next conference so this gives me a lot more time to plan it than I was expecting! I've had a look at what they say so let's have a look at the headlines. Basically, Tax Credits need to end by April 2025 and there are some pensioners receiving TC who need to be moved onto another benefit. They will be asked to claim Universal Credit or Pension Credit depending on their circumstances. If they are already receiving Pension Credit along with their Tax Credits, they will be able to stay on Pension Credit but there Tax Credits will come to end and their Pension Credit will be recalculated to include Child Premiums if this appropriate. If they are worse off without their TCs, their PC could include a 'a transitional additional amount' so they don't see the drop income immediately. If they are not receiving Pension Credit but are only receiving Child Tax Credit not Working Tax Credit, they will be invited to claim Pension Credit. They will be sent a 'tax credit closure notice' and given a deadline by which they need to claim PC to avoid a gap in entitlements and ensure they receive the 'transitional additional amount' if they are entitled to it - although there will be a months 'grace period' if they claim within a month of their deadline. If they are not receiving Pension Credit but are receiving Working Tax Credit (& CTC), they will be sent a Migration Notice and told to make a claim for Universal Credit - the Reg that prevents State Pension age claimants from being entitled to UC is ignored for claimants who receive a Migration Notice and claim on or before their 'final deadline'. These claimants have earned income so will probably be better off on UC that they would be on Pension Credit - haven't found an example of claimants who will be worse off on UC than PC where they're working enough hours to get WTC. Once they're on UC, they won't have any conditionality because their State Pension age and they could be entitled to a Transitional Element if they're worse off on UC than they were on Tax Credits. It's a lot to get your head round! Luckily, I've still got a couple months before the conference to think of lots of case studies and put together my presentation! The conference will look at all aspects of benefits for Pension Age claimants and Mixed Aged Couples.

𝗟𝗶𝗳𝗲𝘁𝗶𝗺𝗲 𝗔𝗹𝗹𝗼𝘄𝗮𝗻𝗰𝗲 𝗥𝗜𝗣(𝗶𝘀𝗵) 🪦 On 6 April 2024 the pension lifetime allowance (LTA) officially disappeared. 𝗛𝗼𝘄𝗲𝘃𝗲𝗿… The abolition did not go quite to plan. Two days before the allowance’s demise, HMRC issued a newsletter saying that ‘there would be further minor technical changes made through a second set of regulations’ without specifying when regulatory round two would happen. To many the hiccup did not come as a surprise. From the moment that the Chancellor announced he would abolish the LTA in less than thirteen months, there was considerable scepticism that such an ambitious timetable could be achieved. 𝗜𝗻 𝗽𝗿𝗮𝗰𝘁𝗶𝗰𝗲… HMRC’s newsletter says ‘…schemes should ensure that members are aware of the need for further legislative changes. As a result, members may need to wait until the regulations are in place before taking or transferring certain benefits. This is to ensure that their available allowances and tax position do not need to be revisited later in the year.’ Fortunately the ‘certain benefits’ mentioned are a small, esoteric, mix, so if you are drawing benefits or making a transfer, you may not have to wait for the new regulations to arrive. 𝗧𝗵𝗲 𝗹𝗼𝗻𝗴 𝘀𝗵𝗮𝗱𝗼𝘄 𝗼𝗳 𝘁𝗵𝗲 𝗟𝗧𝗔 𝗿𝗲𝗺𝗮𝗶𝗻𝘀 While the letter of the law and regulation is that the LTA is no more, its ghost is still to be found haunting pension legislation. For example: ➡️ The normal maximum total lump sum that you can draw free of tax remains at £268,275. That just happens to be 25% of the old standard LTA of £1,073,100. ➡️ The normal maximum lump sum death benefit that can be paid free of tax on death before age 75 is £1,073,100 – the old LTA again. ➡️ Both lump sum figures may be higher if you have any of the various transitional protections dating back as far as 2006. All those protections revolve around the appropriate LTA at the time they were introduced. The corollary is that you cannot now forget about any LTA protection you have, even though the LTA has disappeared from the statute books. As ever, if you have any form of protection, do not take any action without first seeking advice. 𝗪𝗶𝗹𝗹 𝗶𝘁 𝗮𝗹𝗹 𝗰𝗵𝗮𝗻𝗴𝗲 𝗯𝗮𝗰𝗸 𝗮𝗴𝗮𝗶𝗻? When Jeremy Hunt announced, in March 2023, that the LTA would be culled, the Shadow Chancellor, Rachel Reeves, said that a Labour government would reinstate it. This remains the party’s position, although some pension experts believe that realpolitik will mean the pledge ends up having a low or no priority. If nothing else, the huge effort that has gone into not quite legislating to kill the LTA in 13 months is a disincentive to revisit the subject.

In the last couple of days, I have examined two of the three key findings of the 1965 Report of the President’s Cabinet Committee on Private Pension Plan Regulation, i.e., vesting and funding. Today, I take up the regulation of pension investments. Before and during the Committee’s deliberations, trustees of pension trusts had few constraints relating to their choice of investments. It was anticipated that the Committee would recommend some restrictions, however, based on a then nascent trend of pension trustees to seek out more speculative investments in an effort to increase yield. When the Committee was doing its work, pension funds were generally invested to ensure the safety of principle and the liquidity of funds. Government bonds were the principal investment in most plans, and unions tended to invest even more conservatively than corporations. (There was at least one, glaring exception. The Teamsters pension invested in some large Las Vegas gambling hotels and golf courses. What could possibly go wrong?) The Committee was presented with no evidence to support the claim that greater losses would result from higher risk investments, however. It did not therefore suggest any substantive changes to existing law. Notably, the Committee’s finding that higher risk investments would not cause greater losses would not survive scrutiny under modern portfolio theory. While modern portfolio theory first emerged in the 1930s, it was not until the 1990s that Dr. Harry Markowitz shared the Nobel Prize in Economics for his work on the subject. Today, modern portfolio theory is near universally accepted. The Committee did propose some modest legislative changes to require as a condition of tax qualification that a plan may not invest more than ten percent of its funds in the stock of the employing company. It also proposed amending the Welfare Plans Disclosure Act to require additional information related to a plan's investment activities.

EMPLOYERS- Are you aware of the NEW 2024 CPP Deductions? Maximus Rose Living Benefits Inc. Middle-income earners will start seeing a larger portion of their paycheques going toward Canada Pension Plan contributions as of Jan 1 2024. Since 2019, the Quebec Pension Plan and CPP have been undergoing a significant overhaul to bolster retirement benefits for Canadians. Individual and employer contributions have increased, paving the way for higher payouts in the future. Previously, everyone earning over the base amount (currently $3,500) contributes a set portion of their income, up to a maximum amount (last year's was $66,600) that increases slightly every year. Those who are self employed pay both the employee and employer portions. 📈 New Milestone in 2024: CPP introduces a second earnings ceiling. Individuals making more than $68,500 face additional payroll deductions, with a maximum of $188 for earnings up to $73,200. 💪 Strengthening Financial Stability: These changes aim to fortify benefits and overall financial security for prospective retirees. 🔄 Two-Tiered System: The first tier, up to $68,500, maintains existing contribution rates. The second tier, for incomes between $68,500 and $73,200, incurs an additional four percent deduction. 💼 Impact on Employers: Employers are affected as they must match higher contributions. Phased increases since 2019 have seen both worker and employer contribution rates rise by nearly a full percentage point. 🔮 Future Gains: The upgraded CPP policies, continuing through next year, aim to boost retirement income significantly, with benefits increasing from one-quarter to one-third of eligible income. Younger workers are poised to gain the most, potentially seeing a 50% increase in income compared to current pension beneficiaries. 👴💼 No Change in Eligibility: Eligibility criteria for retirement pension, post-retirement benefits, disability pension, and survivor's pension remain unaffected. 💡 Financial Planning Assurance: Employers can take comfort knowing that these changes are designed to enhance the financial well-being of their employees during retirement. Stay tuned for a brighter and more secure retirement future for Canadians! 🌟 #RetirementPlanning #FinancialWellness #CPPRevamp #CanadaPensions #benefits #pension #pensionplanning #retirement #humanresources #hr https://lnkd.in/gGwGYakn

"Besides which, it’s unpleasant and distressing to be told periodically that they think you are dead." When people are dependent on your software systems for their livelihood (pension money, in this example), there's an extra moral burden of responsibility you should be held to in how you build those systems, how you test them, and how you treat users when they run into problems. Based on this article, Teachers' Pensions in the UK, the Department for Education that oversees it, and the IT firm Capita who administers their pension system, appear to have failed that responsibility. To summarize the article, this retired teacher has, for years, had to repeatedly confirm that she is still alive after "the system" flagged her account with a false match against the death register. In some cases, her pension payments have also stopped due to the error. As a software tester, the article raises several red flags for me about how the system is designed and how the problem has been handled: * "death register entries may be matched to scheme members even if personal details differ." Even if personal details differ? That's a bug. Fix the system, don't just give that as an explanation. * "once a possible match has been identified, the beneficiary may be asked to confirm that they are not the same deceased stranger every 12 months since the system...does not log a disproved link." That's another bug. Once someone's confirmed they're not a dead person, they aren't going to suddenly become that same dead person in another 12 months. Again, that's a bug to fix, not an explanation. * "Letters sent to pensioners after a match state that a new process provides updates from the General Register Office on changes of personal circumstances and asks the recipient to get in touch. However, letters make no mention of a deadline or the fact that their payments will cease if they do not respond within 28 days. A spokesperson said this was “to avoid causing upset”". As the victim herself points out in the article "Do they really think that it would be more distressing to be warned that you might lose your pension if you don’t reply within 28 days, than to have payments stopped without notice?" * "After the Guardian queried the process, the DfE said it would make an exception and decouple McGrath’s name from the deceased’s so that she would not be contacted about it again." This is a patch, not a solution. The system is still broken and not every victim will be able to gain the visibility necessary to get their account fixed as a one-off. Fix. The. System. Kudos to Steve Webb for his assessment of the issue at the end of the article--there are fundamental design flaws in this system that, if addressed, should prevent such a false positive from happening in the first place, let alone requiring a beneficiary to repeatedly confirm their identity or lose their payments over it.