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.

  TPR CORPORATE PLAN AND TAILORED REVIEW
The Pensions Regulator (TPR) has published its Corporate Plan for the next three years. It outlines how, as part of TPR's more proactive and targeted approach, new regulatory initiatives will be applied to hundreds more schemes to influence their behaviours and improve outcomes for savers. TPR wants to improve participation, accountability, protection and confidence in occupational pension schemes.

It identifies six priorities for the next

three years:

1. Extending regulatory reach via a wider range of proactive and targeted regulatory interventions.

TPR is working on a targeted supervision model where schemes will be supervised as and when needed in response to potential risks or events. TPR's new supervision team is establishing one-to-one relationships with more than twenty schemes of strategic importance.

TPR will use a "rapid response" team to respond more quickly to reports and intelligence about companies or major restructuring plans. These actions will extend TPR's grip to far more schemes than in the past.

It will start engaging with more schemes by writing to trustees, reminding them of their obligations and directing particular activity. Communications clarifying . . .

17 May 2019  

  COUNTDOWN BULLETIN 45: PHASE 7 EXTENDED
HMRC has published the 45th Countdown Bulletin. Responding to concerns within the industry about the complexity and cost of data issues, HMRC will extend Phase 7 Automation and Scheme Financial Reconciliation (SFR). The extension will last until November 2019.

During the extended period HMRC will rerun:

  • Not In Scheme – Contributions Equivalent Premium (NIS CEP);
  • CEP debit;
  • scheme financial allocations;
  • CEP enforcement;
  • billing; and
  • refunds.
  • The bulletin clarifies what this means for pension scheme administrators.

    HMRC will also run exercises which have been deferred from the original Phase 7 plan: SFR enforcement; and final scheme membership data output.

    There will be a revised cut-off date for the billing rerun; existing bills that could not be agreed and paid can be ignored until the revised bill is received (assuming there is still an overall debt). The cut-off date for the re-run will be after all clerical SRS queries are complete: expected to be by the end of June 2019.

    HMRC is inhibiting all clerical CEP bills, with effect from the week commencing . . .

    17 May 2019  

      A CASE OF INCREASES: APPEAL JUDGMENT IN BURGESS v BIC UK LTD
    The Court of Appeal has reached a "respectful disagreement" with Justice Arnold's original decision in the Burgess v BIC UK Ltd case. The High Court had agreed with trustees that they had correctly granted increases, from 6 April 1992, to pensions in payment earned by service before 6 April 1997.

    The original attempt in 1991/2 to introduce those pre-97 increases was invalid for failure to comply with the necessary formal requirements in the version of the rules

    that then governed the scheme. However, this was not recognised at the time: the pre-97 increases were not only added to pensions in payment, but were also taken into account in calculating accruals of future pension entitlements and the funding of the scheme, until the problem was identified in 2011.

    That version of the Deed and Rules was superseded in May 1993 by a version that, for unconnected reasons, was given retrospective effect from August 1990.

    However, it could be argued that certain powers contained in the 1993 Deed and Rules - had they been in force and exercised at the relevant times in 1991/2 - would have validated the steps which were then taken to introduce the pre-97 increases.

    This generated two questions, whether:

    • the back-dated effect of the 1993 Deed and Rules could . . .

    15 May 2019  

      DC SCHEMES AND THE VALUE FOR MONEY DEBATE
    The Government has responded to the Work and Pensions Select Committee on a number of issues, following Ministers' appearance before the Committee on 3 April 2019.

    Value for Money

    The letter sets out the Government's reason for not being prescriptive about an absolute definition of value for money (VfM) in a defined contribution (DC) scheme. Perceptions of what constitutes

    VfM will vary with the membership, from scheme to scheme.

    Government legislation introduced in February 2018 means that all occupational DC schemes will have published their assessment of VfM for members by November 2019.

    The Government thinks its interventions are working, noting that charges surveys in 2015 and 2017 showed that average charges paid by members of DC schemes

    used for auto-enrolment were between 0.38 and 0.54%, ie well below the 0.75% charge cap.

    Oversight of the Investment Chain

    The Government sets out that in occupational DC schemes, the vast majority of trustees invest via an investment platform in funds. The trustees of the DC schemes are overseen by the DWP and TPR. The Financial Conduct . . .

    10 May 2019  

      TPR ON THE NEED FOR A LONG-TERM OBJECTIVE FOR DB SCHEMES
    Brexitalysis is currently delaying the Queen's Speech, which - if and when it happens - is likely to include a new Pensions Bill. That primary legislation should aim to implement some of the changes highlighted in last year's White Paper on protecting defined benefit (DB) pension schemes. This week The Pensions Regulator (TPR) published a blog article on the subject, setting out future intentions.

    The White Paper tackled the concept of a

    "long-term objective" (LTO) and how DB trustees should achieve the scheme's Statutory Funding Objective in that context. TPR plans to consult in the summer - depending on the legislative timetable - on options for a clearer framework for DB funding.

    This work will form the basis of a further consultation in 2020 on a new draft Code of Practice on DB funding. This too is dependent on the "primary and secondary legislative package".

    The aim is that the new code "will provide a more straightforward, fast track route to demonstrating compliance with requirements but there will be scope for schemes to choose a more bespoke approach subject to further evidence being provided and greater regulatory scrutiny".

    TPR will state its view on what it considers a suitable LTO. For closed schemes, this will include ideas on how reliance on . . .

    10 May 2019  

     
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