LONDON, UK — Hewitt Associates, a global human resources consulting and outsourcing company, has urged employers to start planning for the major changes to the pension tax regime, due to be implemented in April 2011.

The new regime will see a personal annual pension saving allowance of between £30,000 and £45,000, with at least a 40% rate of tax on pension contributions over the threshold. It will raise £3.5 billion for the Government and will potentially affect many final salary members and high earners. 

Hewitt's call to action to employers was issued despite the fact that full legislation is still subject to consultation and will not be published until autumn 2010. However, with only nine months left until implementation, organisations have little time to assess the full range of options and identify the most appropriate, tax-efficient means of retirement saving for their employees.

As a consequence, some of the UK's largest employers would like the UK Government to delay the implementation of its proposed changes to pension tax relief. Employee benefit managers from over 70 major UK-based companies attended a special Hewitt post-Emergency Budget conference call. When asked "do you think the pensions tax proposals should be delayed for a year to allow more time for implementation?" 85% of respondents voted in favour of a delay. 

Tony Baily, principal consultant at Hewitt Associates, said:

"While we welcome the Government's aim to put in place a more simple tax regime for pensions, there is still significant uncertainty just nine months away from the implementation deadline.

"However, in this case employers cannot afford to wait for the full details. We don't expect the Government to delay implementation as it still needs to raise £3.5 billion each year from pension tax changes. Next April will come around very quickly, so companies must take steps now to understand the potential outcomes and how they will need to restructure their benefits to offer best value for their employees."

The new regime is due to be implemented in April 2011, but is subject to informal consultation over the coming months, with draft legislation due out in the autumn. In the interim, high earners are subject to anti-forestalling measures designed to prevent companies from exploiting loop holes as the finer details of the tax measures are finalised.

About Hewitt Associates 
Hewitt Associates (NYSE: HEW) provides leading organisations around the world with expert human resources consulting and outsourcing solutions to help them anticipate and solve their most complex benefits, talent, and related financial challenges. Hewitt works with companies to design, implement, communicate, and administer a wide range of human resources, retirement, investment management, health care, compensation, and talent management strategies. With a history of exceptional client service since 1940, Hewitt has offices in more than 30 countries and employs approximately 23,000 associates who are helping make the world a better place to work. For more information, please visitwww.hewitt.com.

Anna Davies,  Capital MS&L,  +44 207 307 5346
Supriya Mathur,  Capital MS&L,  020 7307 5347
Colin Mayes,  Hewitt Associates,  +44 (0) 1372 733 689