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.

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  COUNTDOWN BULLETIN 42
HMRC's latest (and short) Countdown Bulletin deals exclusively with the scheme financial reconciliation process for:

Deficit Schemes
For schemes in deficit following financial reconciliation, a letter showing the amount due will be sent to the address HMRC holds in relation to the scheme's day-to-day administration. These are expected to arrive during the week commencing 15 April 2019; HMRC wants payment by 21 May 2019 at the latest.

There will be no breakdown of the payment, which will be automatically allocated to the members identified in HMRC's exercise. The oldest debt will be allocated first until all the payment has been used.

The Bulletin makes three further 'important points':

    1) HMRC will not request payments by telephone or email.

    2) HMRC will write off the debt

of schemes who have an overall deficit less than or equal to £1,000.

3) For schemes that have more than £1,000 deficit, HMRC will write off debt that was raised before 18 March 2013, that is 6 years prior to the scheme financial reconciliation run date.

Surplus Schemes
Letters to schemes in surplus that have previously contacted HMRC . . .

15 Feb 2019  

  RESPONSE ON A STRONGER TPR
The DWP has published the Government Response to last summer's consultation on extra teeth for the Pensions Regulator (TPR).

The headline-grabbing part of the consultation considered plans to introduce a new civil penalty of up to £1m for serious breaches and three new criminal offences to punish:

    1) wilful or reckless behaviour in relation to a DB pension scheme;

2) non-compliance with a Contribution Notice (CN); and

3) failure to comply with the notifiable events framework.

The response states the Government will move forward with these measures. The first new criminal offence could attract a maximum penalty of up to seven years' imprisonment and / or unlimited fines. The maximum penalty for the second criminal offence would be unlimited fines. Both of

these could also attract the new £1m civil penalty in addition or instead. The third offence could be subject to the new up to £1m civil penalty, but will not be a criminal offence.

Another major part of the consultation looked at proposals to strengthen, clarify and improve TPR's anti-avoidance powers, specifically in relation to CNs and Financial Support Directions (FSDs). . . .

11 Feb 2019  

  ILLIQUID CULTURE
The DWP has published a consultation setting out proposals, first mooted in Budget 2018, to encourage defined contribution (DC) schemes to consider investing more widely in areas such as start-up companies ('patient capital'); housing; or green energy. The consultation document's full title is "Investment Innovation and Future Consolidation: A Consultation on the Consideration of Illiquid Assets and the Development of Scale in Occupational Defined Contribution schemes".

There is no suggestion of a requirement to invest in a particular way. Under the proposals, larger DC schemes would be required to set out their policy and current practice in relation to illiquid investments. Initially, the Government proposes that this would be via the Statement of Investment Principles (SIP) and potentially the Default SIP.

There would then be an annual report via the Implementation Statement - there would be an expectation of quantitative

data with a degree of granularity, not generic statements. The Government acknowledges that his would require a reliable definition of 'illiquid investments': currently, those that are traded off-exchange or are otherwise less readily tradeable.

Schemes may be allowed some flexibility in interpretation here, both of the categorisation and in assessing the . . .

08 Feb 2019  

  EU EXIT REGULATIONS
The Occupational and Personal Pension Schemes (Amendment etc.) (EU Exit) Regulations 2019 (SI 2019/192) - and similar for Northern Ireland*: SI 2019/193 - have been made in order to address failures of retained EU law to operate effectively and other deficiencies arising from the prospective withdrawal of the UK from the European Union.

    * One such deficiency is the inability of devolved Ministers in Northern

Ireland to take the necessary actions to prepare Northern Ireland for exit. "With exit day less than one year away", the accompanying Explanatory Memorandum notes, "and in the continued absence of a Northern Ireland Executive", Westminster is stepping in to save the day.

Part 2 amends primary legislation, Part 3 amends a long list of secondary legislation, and Part 4 revokes the Cross-Border Activities Regulations.

Appearing in draft form last year, "feedback and engagement with industry stakeholders" revealed an unintended consequence of the draft regulations which could lead to occupational pension schemes having to disinvest from regulated markets outside of the UK. This was not the policy intention, so regulation 29 has been redrafted to extend the definition of regulated market to include UK, EEA and other regulated markets. . . .

07 Feb 2019  

  PPF COMPENSATION CAP & LEVY CEILING
The Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling and Compensation Cap) Order 2019 (SI 2019/159) sets the compensation cap at £40,020.34 from 1 April 2019, an increase stemming from an increase of 2.6% in the general level of earnings from April 2017 to April 2018.

The compensation cap limits the compensation that can be paid by the Board to a single member under the normal pension age of the scheme at the

assessment date and who is not in a receipt of a survivor's or admissible ill health pension. The compensation cap affects only around 0.5% of PPF members.

The Secretary of State sets the standard amount of the compensation cap; compensation to affected members will normally be limited to a maximum of 90% of the cap. From 1 April 2019, the uprated standard amount will provide, at age 65, a maximum level of compensation

of £36,018.31.

This new cap will be increased for all members that retire from 1 April 2019 onwards: later retirement garners a higher annual cap due to the shorter period receiving payments. The PPF has published new age specific compensation cap factors for 2019.

This SI also sets the levy ceiling at . . .

06 Feb 2019  

 
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