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.

  NHS: TAPERED ANNUAL ALLOWANCE
The Department of Health and Social Care (DHSC) has announced that it will shortly open a new consultation about proposals to change pension rules for top doctors, surgeons and high-earning clinicians, which includes giving senior clinicians full flexibility over the amount they put into their pension pots.

The initial consultation published on 22 July 2019 (which was due to close on 14 October) sought to address evidence that high-earning clinicians were reducing their

workload in order to reduce their tax liability. Around a third of NHS consultants and GP practice partners have earnings from the NHS (including non-pensionable earnings from additional work) that bring them potentially within scope of the tapered annual allowance.

This new condoc will replace last month's consultation on the 50:50 proposal: to let clinicians halve their pension contributions in exchange for halving the rate of pension growth.

A freedom of information request by the Financial Adviser revealed that extra tax paid by public sector pension schemes, on behalf of their members, had doubled since the introduction of the tapered annual allowance. Nearly 3,900 members of the NHS scheme used scheme pays in 2017/18, significantly more than any other public sector scheme.

The Chancellor of the Exchequer said . . .

09 Aug 2019  

  RESPONSE ON EXTENDED REMIT FOR TPO
The Government has published its official response to last December's consultation on extending the powers of the Pensions Ombudsman (TPO). The DWP proposed to:

  • make new provision for dispute resolution by TPO, in particular a function for early resolution of disputes before a determination;

  • allow an employer to make a complaint or refer a dispute to

TPO on behalf of itself (Pension Schemes Act 1993 prevents an employer from itself bringing a claim against the provider or administrator, eg in respect of maladministration of a GPP); and

  • make provision in relation to associated signposting provisions.

Overall, the responses were very supportive with a few concerns highlighted.

On the new provision for dispute

resolution, there were concerns this might water down the rights of the parties involved. While TPO may facilitate early resolution, it is not the Government's intention to formalise any agreement reached during the process by giving it a specific legal status. The expectation is that parties involved could enter into their own settlement, which could be enforced by other means. If no settlement is reached, it is envisaged that the . . .

09 Aug 2019  

  TOUGHER INVESTMENT GOVERNANCE
The Pensions Regulator (TPR) is consulting on new guidance to support tougher rules on investment governance.

The stimulus here is the investigation by the Competition and Markets Authority (CMA) into the investment consultancy market and subsequent recommendation for TPR guidance. From December 2019, under the Investment Consultancy and Fiduciary Management Market Investigation Order 2019 (web link), trustees will be required to run competitive

tender processes to recruit fiduciary managers if their schemes use such arrangements for at least 20% of their funds. This requirement will also apply to existing arrangements that have not been made as a result of competitive tender.

Note: the DWP is consulting on bringing this CMA order into the pensions legislation.

Fiduciary managers and investment consultants will also have new duties

relating to reporting charges, fees and performance.

The consultation then is on a suite of guidance documents on:

  • Tendering for fiduciary management services. The CMA Order defines a competitive tender process and TPR's guide aims to provide a set of key principles to illustrate a good practice . . .

08 Aug 2019  

  COSTS & TRANSPARENCY: LATEST REPORT FROM WORK AND PENSIONS COMMITTEE
The House of Commons Work and Pensions Committee has published its 29th report of the 2017-19 session, which this time tackles pension costs and transparency. Despite work in this area, the Committee warns against complacency and identified a number of issues.

On workplace pensions:

Defined contribution pensions

The charge cap on default defined

contribution (DC) pension schemes does not cover all charges and the full extent of charges outside the cap is not known. As a result it is "impossible" to know how well the cap is working in practice.

Defined benefit pensions

In most cases, members of defined benefit (DB) pension schemes should not be directly impacted by the costs or investment decisions of their scheme. However, poor decisions here may

in some cases lead to an underfunded scheme, which can have negative consequences for scheme members. The Committee sees no reason for there to be a lower level of scrutiny by trustees of DB schemes than there is for DC schemes.

Trustees and Independent Governance Committees

The Committee is worried that some trustees are making investment . . .

08 Aug 2019  

  INTERGENERATIONAL FAIRNESS: GOVERNMENT RESPONSE
HM Treasury has published the Government's response to the House of Lords Select Committee report on Intergenerational Fairness and Provision. In this wide-ranging review published in April 2019 the Committee made forty specific recommendations, which are reproduced in HMT's response. We highlight a few of them here.

Lords' Recommendation: the Government should seek to target existing age-related benefits better at individuals

outside the workforce. Age thresholds should be raised. From 2026, when the State Pension age is due to rise to 67, free bus passes and Winter Fuel Payments should be available no sooner than five years after the State Pension age and age thresholds should be aligned across benefits. The difference should be maintained from then on as the State Pension age rises. There should be transitional protection so that individuals who currently receive these payments continue to receive them.

Govt Response: any decisions about changes to the Winter Fuel Payment in the future will be for a subsequent Government to make. The age of eligibility for concessionary travel in England is rising in line with changes to the State Pension age.

Recommendation: the Government should investigate the feasibility of treating these benefits as taxable income for . . .

07 Aug 2019  

 
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