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
- Master trust regulations reissued
- Single financial guidance body – regulations in force
- Pensions dashboard briefing paper published
- HMRC publishes master trust notification form
- HMRC updates its personal pensions statistics
- HMRC updates pension schemes newsletter 103
- HM Treasury announces date for 2018 Budget
- ICO takes enforcement action over failure to pay new data protection fee
- TPR’s online portal for master trust authorisation now open
- TPR publishes response to consultation on its master trust supervision and enforcement policy
The Occupational Pension Schemes (Master Trusts) Regulations 2018 have been reissued, and were formally made on 25 September 2018. This follows an administrative error by the DWP concerning the version made on 5 September 2018.
The regulations, which came into force today (1 October 2018), implement the new authorisation and supervisory regime for master trust schemes under the Pension Schemes Act 2017. Among other things, they set out:
- the conditions that must be met by master trusts seeking authorisation, and the matters TPR must take into account in its assessments of schemes
- the authorisation fees payable by new and existing master trusts
- the scope of exemptions from the regime
- information and notification requirements.
The Financial Guidance and Claims Act 2018 (Commencement No. 3 and Transitory Provisions (Modification)) Regulations 2018 were also made on 25 September 2018. These regulations bring into force certain provisions of the Financial Guidance and Claims Act 2018 from today (1 October 2018), including provision for the establishment of the single financial guidance body.
The new guidance body, which will take on the advisory functions of TPAS, MAS and Pension Wise to offer money and pension guidance across the UK and debt advice (in England), is expected to launch in January 2019.
The House of Commons Library published a briefing paper on the pensions dashboard on 26 September 2018.
The paper explains the background to the dashboard, and examines the “Feasibility Study” being conducted by the DWP to explore in more detail issues such as the viability of different delivery models, selection of a suitable governance framework, and the regulation, standards, data security and identity verification needed to support the dashboard. The Government is expected to report its Feasibility Study findings “shortly”.
HMRC has published a link to APSS578, its online form for scheme administrators to use to inform HMRC that a scheme:
- has become a master trust, or
- is no longer a master trust.
The form must reach HMRC within 30 days of either event. This is in addition to TPR’s authorisation process (see below).
The new notification requirement has been added to HMRC’s guidance on “sending pension scheme reports”. HMRC has also updated its guidance on “managing a registered pension scheme” and its “information requirements for pension schemes” to include sections on master trusts.
HMRC has published its latest data on personal pensions. This includes the amount of lifetime and annual allowance charges received, as well as estimates of the number of individuals contributing to personal pension arrangements by gender and age, country and region and by employment status.
The Chancellor, Philip Hammond, has announced that the next Budget will take place on Monday 29 October 2018.
The ICO has announced that it has begun formal enforcement action against 34 organisations that have failed to pay the new data protection fee. It has sent notices of its intent to fine the organisations unless they pay, with those who fail to do so facing a maximum fine of £4,350.
A transitional period applies, so that data controllers with a registration under the former Data Protection Act 1998 will not have to pay the new fee until that registration expires.
The ICO has published a guide to help data controllers in working out what fee, if any, they are likely to pay.
To coincide with the new law on DC master trust authorisation, which came into full effect today (1 October 2018), TPR’s online portal is now accepting applications from master trust schemes. Existing master trusts will have six months to apply for authorisation, or wind up and exit the market.
To be authorised by TPR, master trusts must demonstrate that they meet extensive criteria in a number of areas. The Pension Schemes Act 2017 and related regulations set out the legal framework and tests associated with authorisation and ongoing supervision. A separate Code of practice and TPR guidance fill in some of the gaps to explain TPR’s proposed approach. It is important to consider the Code alongside the detail of the legislation and the scheme’s own set up in preparing an application for authorisation.
According to TPR’s latest master trust facts and figures (released on 1 October 2018), 30 master trusts have so far exited or are exiting the market. This leaves 58 which will either need to apply for authorisation or exit in the coming months.
For more information, please see our latest DC hot topic on master trust authorisation.
Following the consultation, TPR has made a number of changes to the policy to clarify certain aspects.
In addition, TPR has committed to publishing further guidance in relation to triggering events (for example, where an insolvency event occurs in relation to the scheme funder or the trustees decide the scheme is at risk of failure), significant events (such as a failure to meet a key milestone, target, estimate or assumption in the business plan) and the supervisory return. In due course, TPR may also include examples of enforcement action taken in relation to master trusts in its compliance and enforcement bulletin.
TPR notes that the supervision element of its “TPR Future” initiative will launch later this year, and that it will supervise selected pension schemes as part of its wider shift to a more proactive regulatory approach. This may include a limited number of master trusts. If master trusts are included within the TPR Future initiative and are subsequently authorised, TPR has said that it will liaise with these schemes to explain any practical implications.
TPR has also said that it will look to refine its operational approach where possible, and that it will keep its master trust supervision and enforcement policy under review.