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'S 15-YEAR PLAN & UNANNOUNCED GUIDANCE CHANGE
The Pensions Regulator (TPR) has published a discussion document considering the provisional strategy the regulator will pursue over a fifteen-year horizon.

The shift to DC in the first fifteen years of TPR's existence is going to change the regulator's focus from a scheme-based view "to one that puts the saver at the heart of all that we do". This acknowledgment in the CEO's introduction - the phrase is emblazoned on the front

cover of the document too - is also noteworthy in referencing 'savers' rather than 'members'.

Aries comment
While the risks in DC arrangements as know them do fall largely on the individual, it is to be hoped that TPR has not abandoned the prospect raised by the Pension Schemes Bill of a future for collective DC arrangements.

TPR's strategy analyses different groups

of savers by generation: Baby Boomers (born 1946-1964), Generation X (born 1965-1984) and Millennials (born 1985-2004). Each is divided into three income levels: high-middle, middle-low, and low-very low, with. the expected relative reliance of each on DB, DC and State pensions plus other long-term savings.

Aries comment
As you would expect, high-middle
. . .

18 Oct 2020  

  HMRC PENSIONS INDUSTRY STAKEHOLDER FORUM
Twice a year since 1999 HMRC had held meetings with representatives of pensions industry bodies, always attended by most of the key top-level people in pensions at HMRC. Aries has reported on every one of these meetings. Here is what went on at the latest, held as a conference call via Microsoft Teams on 7 October 2020.

Anne Smith, standing in for Guy Hooper's successor as Head of Pensions, Savings & Charities Policy, opened the meeting by explaining that we weren't meeting online

because some attendees in the past had been unable to dial in on Teams (and anyway a conference call had worked last time).

Yasmin Carney and Ian Marston spoke to a report, provided with the meeting agenda, on the 'call for evidence' on 'raising standards in the tax advice market', which ran from 19 March to 28 August 2020. This had stemmed from a recommendation made by Sir Amyas Morse in his review of the Loan Scheme

in 2019. Right up to that day they had been collating responses, which had given them "lots of food for thought", and the door had not been closed to further engagement.

They had got a clear message that HMRC should not be the regulator of any tax advice regime, on grounds of conflict of interest. A key question was what would be the impact on the UK economy . . .

18 Oct 2020  

  GMP INDEXATION IN THE NEWS
In August last year, the Government was found guilty of maladministration because it had failed to make clear that some people with a Guaranteed Minimum Pension (GMP) could be worse off as a result of state pension reforms introduced in April 2016.

The DWP was aware the changes could negatively affect people with long periods of contracting out who were due to reach State Pension Age (SPA) shortly after the new State Pension was introduced from

April 2016. Such people no longer benefited from inflationary increases from the DWP (so-called GMP indexation), although those who did not contract out received annual inflationary increases on the additional NICs to their second state pension. This could amount to a person with a GMP receiving much less than they were expecting to over the course of their retirement, and less than they would receive had they not 'contracted out'.

The verdict stated that the Government

used 'flawed arguments', saying that negative impacts could be offset for those with long periods of contracting out who were due to reach SPA shortly after April 2016. Despite warnings from both the National Audit Office and the Work and Pensions Select Committee, the DWP failed to provide clear, accurate and complete information through its pension forecasts, impact assessments and other literature. . . .

09 Oct 2020  

  PPF RESPONSE TO TPR'S DB FUNDING CODE
The Pension Protection Fund (PPF) has responded to the Pension Regulator's consultation on a revised defined benefit (DB) funding Code of Practice.

The PPF supports the Government's action to require all DB schemes to have a long-term funding objective (LTO) and acknowledges that the current framework has made it difficult to tackle scheme deficits (although a low yield environment has also played its part). Even schemes with strong employers have significant

deficits and, in some case, very long recovery plans.

The case for change is well made and the PPF believes that proposed approach to achieve it is "well thought through and helpful" with clear, objective standards allowing robust regulation. The proposed twin-track approach of Bespoke or Fast-Track is supported by the PPF. The key will be defining the various standards.

Over the long-term, the PPF believes that

schemes and employers should be planning to reach, and maintain, a funding level that protects their members in the event of employer insolvency and this should form the basis of the low-dependency funding basis. Protect in this context, the PPF suggests, should mean ensuring any losses to members are "constrained to acceptable levels" rather than be equivalent to a buy-out basis. The objective ultimately being to ensure . . .

08 Oct 2020  

  TREASURY RESPONSE TO PAC TAX RELIEF REPORT & PSN 124
In its response to a Report by the House of Commons Public Accounts Committee (PAC), the Government has rejected calls to evaluate the impact of pension tax reliefs within twelve months.

The rationale here is the number of previous consultations already conducted:

  • Pensions tax relief administration: call for evidence (July 2020).

  • Public service pension schemes consultation (July 2020).

  • Changes to income thresholds for calculating the Tapered Annual Allowance (March 2020).

  • Reducing the Money Purchase Annual Allowance (March 2017).

The Government has promised to "continue to engage with stakeholders to understand the regime's impacts and

gather evidence through consultations such as those listed above but does not think it is the right time now for a formal evaluation".

It has acquiesced on the majority of recommendations however. Notably it has agreed to:

  • Publish the criteria it will use to determine . . .

02 Oct 2020  

 
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