Following the announcement in the Budget last year that legislation would be brought in to restrict higher rate tax relief on pension contributions for high earners, members of the AMPS committee have been involved in attending Treasury consultation meetings and industry workshops on this topic.

A formal Consultation Document entitled 'Implementing the restriction of pensions tax relief' was issued by the Treasury in December 2009 with a response date of 3rd March 2010.

Although AMPS has given input and feedback to Treasury / HMRC during the course of its involvement in the consultation process, we have today submitted a formal response to the consultation document.

Attached is a copy of our response.

The key points are summarised as follows:

• AMPS does not support the implementation of the proposed legislation to restrict pensions tax relief.
•  The proposed legislation is being driven through too rapidly; would create extensive complication and would be damaging to HM Government’s wider objectives of encouraging individual’s to make adequate provision for retirement through use of pension arrangements.
•  AMPS will support HM Government in a more measured consultation process to determine how best to achieve pension policy objectives, including consideration of the issues around pension tax relief's.
• Support, as an interim measure, the use of a reduced Annual Allowance as an immediate and effective means of restricting pensions tax relief.
•  We suggest that the Annual Allowance should be set at a level of between £50,000 and £60,000 and preferably expressed as a percentage of the Life Time Allowance.

Please refer to the full report for our rationale on taking this position.

Robert Graves, AMPS Chairman.

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