PENSIONS NEWS

On Tuesday 3 December, Aries attended this Transparency Task Force (TTF) event, hosted by Mayer Brown and sponsored by Cairn Consulting, Switchfoot Teams, and the Pension Scams Industry Group.

Andy Agathangelou began by explaining a bit about the organisation he founded. In a nutshell, the TTF is:

"an international movement of good people that want the financial

services sector to be more transparent, truthful and trustworthy."

Mr Agathangelou argued that "the financial ecosystem is profoundly important to the wellbeing of society, the global economy and political stability." Unfortunately, in a recent study by Edelman (the world's biggest PR firm), Financial Services was voted the least trusted sector, just behind Consumer Packaged Goods, Energy, and Fashion. This is the sad result of multiple failures, including hidden costs,

short-termism, mis-selling, and scams. TTF's mission is therefore:

"to help protect consumers' financial interests by reforming financial services, so the public get a better deal; and trustworthiness and confidence can be restored."

They have a 13 point plan to address these issues: . . .

05 Dec 2019  

On 28 November 2019, the Pensions Regulator (TPR) updated its guidance on new duties, introduced by the Competition and Markets Authority (CMA) from 10 December 2019, for trustees and managers of occupational pension schemes. There are four documents - the drafts of which were all subject to earlier consultation - covering:

Document 1
Choosing an investment governance model

Whilst noting there is a wider spectrum of governance structures, the guidance focuses on two models:

i) Investment consultancy: the trustees, following advice from the investment consultant, take strategic investment decisions; day-to-day investment decisions are delegated to the investment managers.

ii) Full fiduciary management: the delegation of investment powers

to the chosen fiduciary manager.

Before choosing an investment governance model, trustees should:

• Assess the current investment governance capability and how it is likely to evolve in the future.
• Define and agree their investment beliefs and also objectives for the scheme.
. . .

04 Dec 2019  

HMRC leads the latest PSN (Pension Schemes Newsletter) with a note that scheme administrators who are uncertain about LTA event reporting for 2019/20 of members who have relied upon either

• individual protection 2014 (applied for using the digital service);
• fixed protection 2016; or
• individual protection 2016,

should email HMRC.

Following enrolment for the Manage and Register Pension Schemes service, it is possible to add administrators and assistants. However, this should be completed before they log in to use the service. Otherwise, they will be treated as a new scheme administrator: a second enrolment will cause errors on HMRC systems.

Similarly, practitioners will only be able to use one practitioner ID for each Corporation Tax UTR or National

Insurance number. Pension scheme practitioners with one Corporation Tax UTR but multiple scheme practitioner IDs, will need to move the schemes under one practitioner ID on the Pension Schemes Online service ahead of pension scheme migration to the Managing Pension Schemes service. HMRC details how it can help with this process.

Aries comment . . .

29 Nov 2019  

On Wednesday 20 November, Aries attended this Pensions Management Institute morning seminar. We think much of it will be interesting to you.

Jonathan Watts-Lay, (Director, Wealth at Work) began the day explaining why avoiding poor transfer outcomes has become a focal point. 'Freedom and Choice', our then-Chancellor George Osborne's 2014 DC flexibility initiative, changed the landscape:

1. DC members (over 55) could take their pots as cash.
2. DB members could not, unless transferring their benefit value to DC.
3. As a precaution, the advice requirement was introduced for DB CETVs of £30k or more.
4. High CETVs, combined with this new flexibility incentive, created a 'perfect storm'.

The demand for DB schemes to provide transfer quotations has rocketed.

The cash equivalent of a DB pension is hard for a layman to consider rationally. It may be valued higher than their house. Analysis shows that those with CETVs over £250k are significantly more likely to transfer, all else remaining equal, than those with lower CETVs. Independent advice is crucial so people understand that their DB pension may actually be worth more than their house. But establishing whether transferring is sensible is a . . .

23 Nov 2019  

The impact of the pension tax rules on NHS staff is well documented and the Government has consulted on how to prevent the tax regime from driving clinicians to reduce work commitments - the busy winter season is coming.

The General Election has unceremoniously obstructed an official response, making a swift resolution unlikely before the end of the tax year. Consequently, NHS England and NHS Improvement have decided to take

exceptional action. Qualifying clinicians who are members of the NHS Pension Scheme and face a tax charge in respect of work undertaken in 2019/20 as a result of breaching their annual pension allowance will be able to defer this charge, by choosing 'Scheme Pays' on their pension form.

Now for the exceptional bit: the NHS will make a contractually binding commitment to pay such members a corresponding amount on retirement,

ensuring that they are fully compensated in retirement for the effect of the 2019/20 Scheme Pays deduction on their income from the NHS Pension Scheme in retirement.

Local employers will incur no extra net costs as a result of this provision, which will be funded nationally. This commitment is supported by the Department of Health and Social Care and Government. . . .

22 Nov 2019