7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.
In this 7 Days
- EIOPA publishes second IORP II implementation report
- FCA / PRA instruments on FSCS management expenses levy limit
- Countdown Bulletin 44 updated
- HMRC publishes Pension schemes newsletter 108
- Safeway v Newton (AG Opinion – 28 March 2019)
On 26 March 2019, EIOPA published a second report on the implementation of IORP II. This follows a report published in November 2018 setting out principles and guidance for the Pension Benefit Statement.
The latest report, on “Other Information to be provided to Prospective and Current Members: Guidance and Principles based on Current Practices”, analyses current national practices, and sets out principles and guidance in relation to the disclosure of pension information to “prospective members and members in the pre-retirement and pay-out phase”.
The PRA state that they received no responses to the consultation that were relevant to the proposals consulted upon, and is therefore implementing them as consulted.
Under FSMA, the PRA and the FCA must set a limit for the total management expenses that the FSCS can levy on financial services firms without further formal consultation. The MELL of £79.6 million will apply from 1 April 2019 (the start of the FSCS’ financial year) to 31 March 2020. This figure covers:
- a management expenses budget (£74.6 million), excluding complainants’ compensation costs (which are levied separately)
- an unlevied contingency reserve of £5 million. This would only be levied if the FSCS faced a significant unforeseen event or events that necessitated additional funding.
HMRC published an update to Countdown Bulletin 44 on 29 March 2019, providing further information on the release dates of refund letters and cheques for schemes in surplus that have engaged with HMRC following the ending of DB contracting-out.
On 29 March 2019, HMRC published pension schemes Newsletter 108. It includes, amongst other items, articles on:
- relief at source, including links to new guidance on completion of annual returns
- the GMP working group, considering tax issues related to equalisation. The first meeting of the group will take place in April 2019
- master trust authorisation and supervision
- the Managing Pension Schemes service
- reporting on Pension Schemes Online service
- updates to the annual allowance calculator.
In October 2017, the Court of Appeal referred a question to the CJEU regarding a scheme’s ability to equalise its retirement ages retrospectively.
Advocate General Evgeni Tanchev has now concluded that the prohibition under EU law on retroactive levelling down applies even when the rules of a pension scheme permit retrospective amendment (as they did in this case).
An Advocate General’s Opinion, whilst guiding, is not binding, and so we await full judgment from the CJEU.
See our case report for further details.