PENSIONS NEWS

The Queen's Speech 2019 today has introduced the expected Pension Schemes Bill:

"To help people plan for the future, measures will be brought forward to provide simpler oversight of pensions savings. To protect people's savings for later life, new laws will provide greater powers to tackle irresponsible management of private pension schemes."

The Briefing Notes add slightly more detail

on the likely main elements:

• Providing a framework for the establishment, operation and regulation of collective money purchase schemes (Collective Defined Contribution pensions).

• Strengthening the Pensions Regulator's (TPR's) powers and the existing sanctions regime: introducing new criminal offences, with the most serious carrying a maximum sentence of seven

years' imprisonment and a civil penalty of up to £1 million.

• Giving TPR's powers to obtain the right information about a scheme and its sponsoring employer in a timely manner, ensuring that it is able to gain redress for pension schemes and members.

• Providing a framework . . .

14 Oct 2019  

The Pensions Ombudsman (TPO) has published its Corporate Plan 2019/22.

The focus is on ensuring every dispute can be resolved at the earliest point, with no loss of quality. Some of the "key deliverables" here will be:

• Phase 2 of its Digitalisation Programme: a major overhaul of the website and the introduction of an online portal where customers will be able to complete online forms

and upload documents.

• A casework reorganisation that will incorporate an enhanced triage process and tracking of cases that will improve the "customer's journey".

• Closing cases at a rate equivalent to 90% of cases taken on; closing enquiries at a rate equivalent to 90% of enquiries received; and by the end of the year, have no more than

10% of cases open aged more than 12 months (section 4 of the plan looks in more depth at these key performance indicators).

• Expanding its quality framework so that high quality and consistent outputs are guaranteed.

• Continuing to develop strong working relationships with both . . .

11 Oct 2019  

Following its call to action, the PASA GMP Equalisation Working Group has published its guidance note outlining methods that schemes could use to equalise Guaranteed Minimum Pensions (GMPs) and how to tackle common issues arising. Via the PASA press release, both the Pensions Regulator and the Pensions Ombudsman welcomed the guidance note.

The Guidance has three main sections: A. Correcting past underpayments;

B. Approaches for equalising future benefit payments; and C. Common unanswered issues.

Section C considers a number of thorny issues: transfers in; split normal retirement ages; revaluation and anti-franking; survivor's pensions; GMP underpins in defined contribution and cash balance schemes; GMP conversion; benefits already in payment; divorce cases; top up schemes; and female members with no GMP. The Group is keen to hear

examples of other questions schemes may encounter, which could be incorporated in future updates.

Those revisions will arrive as and when there are material developments. One which is expected is publication of HMRC guidance; many schemes will choose to wait for this before they implement an equalisation project.

An appendix to the guidance provides . . .

09 Oct 2019  

The Pension Protection Fund (PPF) has announced an 8% increase to its levy estimate for 2020/21: it expects to collect £620m, up from from £575m in 2019/20.

Whilst there are few changes to the methodology, the rise reflects expected increases in scheme risks. Scheme funding is expected to decline thanks to the significant recent reduction in gilt yields. The PPF thinks this will translate into pension schemes being, in aggregate, less well funded.

The PPF stated, "As we aren't changing the rules, and bills are based on the actual risk of individual schemes, the impact on individual schemes will depend very much on their specific circumstances."

The levy consultation then does not propose significant changes to levy rules but invites comment on future development in relation to
(a) schemes without a substantive sponsor; and
(b) commercial consolidators.

On contingent assets, the PPF has reviewed its experience of the requirement, introduced in 2018/19, for guarantor strength reports to be submitted where the anticipated levy benefit was £100,000 or more. The PPF is satisfied with the rigour applied in most cases, but has proposed revised guidance with the aim of ensuring that the reports provide a holistic assessment and avoid a tick box approach. It has also clarified its . . .

09 Oct 2019  

On 20 September 2019, to no fanfare at all at the time, The Pensions Regulator (TPR) published rewritten guidance on record-keeping. This guidance for trustees can be found within the 'Governance and administration' area of the 'Managing DB benefits' section of TPR's website.

In a related press release on 2 October 2019, TPR revealed it has asked 400 schemes to conduct a data review within six months. TPR expects schemes to review data at least once a year.

It appears the schemes in question have failed to comply and have not reviewed data in the last three years. Fines of up to £5,000 for an individual or up to £50,000 in any other case could be incoming.

The statement references the latest 'managing DB' record-keeping guidance, the intention being to help trustees and scheme managers to meet their duties. However, the 400 schemes in the spotlight are not solely defined benefit (DB): they include defined contribution (DC) and

public service schemes. The press release does not however cite the separate record-keeping guidance aimed at DC schemes (published June 2016) or the record-keeping section of the public service Code of Practice (Code 14). The DC guidance does reference this latest DB guidance, which in turn refers to public service schemes throughout. This new guidance then has application beyond DB schemes, despite its current positioning on . . .

04 Oct 2019