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.

  GOVERNANCE AND DISCLOSURE: DWP ISSUES SRD II FACT SHEET
The DWP has released a fact sheet explaining requirements established by Shareholder Rights Directive II (SRD II), from 1 October 2019, as it relates to workplace pension scheme stewardship and governance.

SRD II has been adopted into UK law through the Occupational Pension Schemes (Investment and Disclosure) (Amendment) Regulations 2019 (SI 2019/982) and the Pension Protection Fund (Pensionable Service) and

Occupational Pension Schemes (Investment and Disclosure) (Amendment and Modification) Regulations 2018 (SI 2018/988). The fact sheet provides a summary of the requirements and the rationale for them.

Under the heading 'Why it's beneficial', the DWP gives three reasons in support of SRD II:

  • SRD II seeks to encourage investors to adopt a long-term focus in their

investment strategies considering social and environmental issues and being transparent about how they invest.

  • It improves oversight of investments by pension schemes, asset managers and insurers, will help to create sustainable value for beneficiaries, and promote the long-term success of companies, the economy and society. . .

13 Sept 2019  

  BYE TO RPI?
With several high profile legal cases (eg the BT appeal and BA v Airways Pensions, also the Barnardo's case and Burgess v BIC) involving schemes trying to switch the basis used for indexation of pensions in payment, it seems that the undesirability of the Retail Prices Index (RPI) as a measure of inflation has been on our agenda for some time. And so it has.

In the Budget statement of June 2010, the Chancellor announced that (with some

exceptions) the Consumer Prices Index (CPI) rather than RPI would be the basis for determining increases for all occupational pensions in payment made by the Pension Protection Fund and the Financial Assistance Scheme.

In July 2010, the DWP followed this up by announcing that the future basis for determining the percentage increase in the general level of prices for the purposes of statutory increases for occupational pensions would be CPI rather than RPI.

Legislation was amended but schemes with RPI hard-wired into their Rules were stuck with RPI, at least pending legal action (see above). RPI would continue to be the basis for calculating deferred pension increases up to September 2010, replaced by CPI thereafter.

Defined Benefit pension schemes often seek to match future pension liabilities with index-linked gilts. . . .

06 Sept 2019  

  PPF LEVY GUIDE
The Pension Protection Fund (PPF) has published a 48-page guide to complement and explain the Pension Protection Levy 2019/20 invoice.

The PPF's bank details have changed, so the guide provides up to date information here and also asks that remittance advice be forwarded to its credit control email. The invoice is due for immediate payment unless a Levy Payment Plan has been agreed. An interest payment of 5% above the Bank of England base rate will start

accruing after 28 calendar days if the invoice remains unpaid.

Levy Payment Plans can be agreed where a scheme is genuinely struggling to pay within 28 days. Separately, the PPF has published a new page on paying the levy in instalments. There were only fifteen requests for such payment plans in each of 2017/18 and 2018/19.

The invoice will not cover the Administration Levy, General Levy or

Fraud Compensation levy, all of which are invoiced separately by the Pensions Regulator.

The bulk of the guide deals with the levy calculation itself, particularly insolvency risk, risk reduction and asset backed funding structures. There is a significant section on querying the invoice: contact Experian to check details used; contact the PPF to query the scheme-based . . .

05 Sept 2019  

  BRIEF BULLETINS
The dog days of summer have yielded shorter than usual updates from HMRC:

Pension Schemes Newsletter 113

In PSN 113, HMRC makes its usual warning that where there are still annual returns of information outstanding from scheme administrators who've submitted interim repayment claims for 2019 to 2020, any subsequent interim repayments will be withheld, pending receipt of the outstanding information.

Submissions of annual returns of information that fail processing will still be deemed outstanding and HMRC will stop any subsequent interim repayments, pending successful re-submission. Failure for a third time will stop all future interim repayments to the scheme until a further re-submission is received and is deemed successful.

HMRC states it is also really important that submission of the annual return of information and the APSS590 declaration

for 2018 to 2019 is made by 30 September 2019. This will ensure that HMRC can provide the correct residency status for members on the January 2020 notification of residency status report. This can then be used to give members tax relief from 5 April 2020 and claim the right amount of repayment from HMRC.

Aries comment
Whether or not members who are Scottish taxpayers are given the correct
. . .

30 Aug 2019  

  TPO REVIEWED
The DWP has published its tailored review of The Pensions Ombudsman (TPO), the first dedicated review of the organisation. It considers the remit, governance, efficiency and effectiveness of TPO.

Spoiler: TPO is a well-respected and effective organisation that has grown rapidly, broadened its remit to include the TPAS Early Resolution Team and moved offices whilst doing so.

There are however a number

of recommendations for improvement:

Form and function: TPO should continue building its relationship with the Financial Ombudsman Service (FOS), developing a collaborative process to reduce the potential for customer confusion and duplication of efforts. There is not a strong case to merge TPO and the FOS.

Both should work together to commission a regular feed of case data to both boards, to assist DWP and HMT to consider the

need for action to reduce the scope for jurisdictional overlaps and gaps.

Relationship with the DWP: the DWP should provide greater support and challenge to TPO, and be properly resourced in order to achieve this.

Relationship with the TPR: TPO should continue to strengthen its relationship with the Pensions Regulator (TPR) with more joint working. TPO could share more . . .

28 Aug 2019  

 
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