PENSIONS NEWS

Aries monitors every development in new and proposed legislation and official guidance.   Clients are kept up to date via the website, email alerts and tweets.   Aries serves as a one-stop source of intelligence on everything that is going on and coming up.   Aries doesn't miss anything of significance.

Here is a selection from our most recent headlines. You can get the fuller details by sending us an email - just click here to fire one off.

  CDC ADVENT
Pensions Minister Guy Opperman this autumn promised a formal consultation on Collective Defined Contribution (CDC), and so it has come to pass with an announcement in the House of Commons. The DWP-led consultation paper has been published online and runs until 16 January 2019. It sets out the Government's vision for this new form of occupational pension scheme: policy intention then rather than draft legislation.

This does not herald an alteration of

the categorisation of existing schemes; rather it will allow new schemes "designed for members" to pool investment and longevity risk in providing a pension in retirement.

Within a CDC scheme, a member's contributions are invested in a collective fund with the pension being calculated as follows:

  • estimating how much money is needed to provide the target level

of benefits to each member;

  • adding up the values for each member to determine the total assets available to provide target benefits to all members;

  • if the assets available are higher or lower than the estimated money required to meet target benefits, make corresponding adjustments to: (i) the current payment of . . .

11 Nov 2018  

  BAN ON COLD CALLING: FINAL GOVERNMENT RESPONSE
The Government has responded to its short summer consultation on draft regulations to ban pensions cold calling. This follows an original consultation in December 2016 to which the Government responded in August 2017.

Against a strong consensus that 'something must be done', awareness has developed that an effective solution is not easily found. The Government is clearly pinning its hopes on raising consumer awareness that pensions cold calling is

illegal and encouraging people to put the phone down if they believe they are receiving an illegal pensions cold call.

A number of respondents suggested the ban should have a wider scope, covering cold calls related to retail investments and saving. The Government does not consider this to be proportionate at the moment. However, the ban will apply if pensions are discussed, whether or not pensions is the primary purpose of the cold call.

The ban will not be limited to transfers between pension schemes; it will cover calls where fraudsters encourage individuals to release funds from their pension and transfer them into a bank account, before investing them in inappropriate products. Under the Financial Guidance and Claims Act 2018 section 22 the Secretary of State must keep under review whether a prohibition on unsolicited direct marketing in . . .

09 Nov 2018  

  PPF TO IMPLEMENT HAMPSHIRE RULING
Following on from its promise to consider the CJEU ruling in the Hampshire case, the Pensions Protection Fund (PPF) has now released a statement on how the ruling will be implemented.

The ruling states that pension scheme members should receive at least 50% of the value of their accrued old age benefits if their employer becomes insolvent. This affects a small number of PPF and Financial Assistance Scheme (FAS) members who are currently receiving

less than 50%: particularly where compensation / assistance is capped, but there are also some for whom there is a difference between the indexation and revaluation rates they were due in the original scheme.

The ruling does not provide complete clarity on implementation; the PPF predicts Government legislation and / or further court rulings. The PPF is not resting on its laurels: the statement provides a high-level explanation of its

intended phased approach, focusing first on capped pensioners.

The PPF is likely to need further information about affected members' original schemes and is batch-sending letters to pensioners. The type of information requested includes the pension increases that would have been applied under the original scheme and what would have been paid to a . . .

08 Nov 2018  

  GMPS EFFECTIVELY EQUAL AT LAST?
In March 2017, the Government confirmed it had no appetite for legislating for the use of its preferred methodology to equalising benefits for the effect of GMPs. It also stated it would consider its position in light of any legal decisions resulting from the case of Lloyds Banking Group Pensions Trustees Ltd v Lloyds Bank plc.

The High Court has now ruled that schemes must address inequalities caused by GMP rights accrued between 17 May 1990 (the date of the Barber

judgment) and 5 April 1997 (cessation of GMP accrual). GMPs are a form of 'pay' for the purposes of Article 157 (equal pay principle) of the Treaty on the Functioning of the European Union (web link). There is no objective justification for unequal treatment.

So what about the 'how' then? In 2016, the Government proposed its preferred methodology: a modification of the GMP conversion approach involving a one-off calculation and actuarial comparison of

the benefits a man and woman would have, with the greater of the two converted into an ordinary scheme benefit under sections 24A to 24H of the Pension Schemes Act 1993 (after some amendments to the legislation). The Government noted that other methods were possible.

The High Court was asked to examine four possible methods (with a number . . .

01 Nov 2018  

  PENSION SCHEMES NEWSLETTER 104
Not wanting to steal the Budget thunder, HMRC has today published Pension Schemes Newsletter 104. It reiterates the Budget announcement that the standard lifetime allowance for 2019/20 will be £ 1,055,000, although we await regulations (FA 2004 s.218 (2D)).

The PSN heralds the publication of official statistics on flexible payments from pensions for the period 1 July 2018 to 30 September 2018. In advance, HMRC notes that in this quarter alone it has

processed: 10,580 P55 forms; 5,604 P53Z forms; and 2,169 P50Z forms. The total value of overpaid tax repaid was £38,252,931.

There are also statistics on applications to register new pension schemes from 6 April 2018 to 30 September 2018: 923 total applications, 21% down on the same period last year. More than half of those applications remain outstanding; 8% of those considered have been refused. HMRC reminds scheme administrators to

check the information requested; applications not providing all the information will be rejected.

From 13 November 2018, the following new features will be added to the Manage and Register Pension Schemes (MRPS) service:

  • view the details of schemes;
  • view details held on the scheme . . .

31 Oct 2018  

 
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