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
- Coronavirus – Sackers response
- FCA update on FOS approach during Coronavirus
- Financial regulators’ Regulatory Initiatives Grid
- Law Society position on the use of virtual execution and e-signatures
- ONS plans for providing prices statistics during Coronavirus
- TPR updated guidance on auto-enrolment for furloughed employees
- Mr N (PO-22730): employer responsible for notifying member of changes to late retirement factors
At Sackers we are committed to ensuring that the Coronavirus outbreak causes minimal disruption for our clients, and have taken several steps to ensure it is ‘business as usual’. For details of these steps, as well as key points for trustees and employers to consider in light of the outbreak (which we will continue to update), please see the dedicated section of our website, or talk to your usual Sackers contact.
On 7 May 2020, the FCA updated its guidance to firms on handling complaints during Coronavirus, to include information on the FOS’s general approach during this time. This states that “the challenges faced by firms during this period, and what counted as good industry practice at the time” will be taken into account in the FOS’s assessment of cases. The guidance includes links to the underlying letter from the FCA to the FOS requesting confirmation that the FOS will take into account changes to the FCA’s guidance intended to provide firms with flexibility at this time, and the response from the FOS, giving this confirmation.
On 7 May 2020, the Financial Services Regulatory Initiatives Forum, made up of a number of financial regulators including HMT, the FCA and PRA, published its Regulatory Initiatives Grid (see 7 Days). The Grid provides detail on the timing of regulatory initiatives over a 12-month horizon, with the intention of allowing stakeholders to “understand – and plan for – the timing of the initiatives that may have a significant operational impact on them”. The Grid will be published “at least twice a year” and is currently a one-year pilot exercise; stakeholders are encouraged to provide feedback.
The Grid includes a section on pensions and retirement income, setting out initiatives led by the FCA: the fourth thematic review into DB-DC pension transfer advice, the Independent Governance Committees effectiveness review (timeline to be announced) and the Assessing Suitability Review 2 (scheduled for 2021).
On 7 May 2020, the Law Society published a note on the use of virtual execution and e-signatures during the Coronavirus pandemic. The note states that “since the outbreak of the pandemic, the law in these areas remains unchanged”. It brings together a variety of established guidance on these points with some “top tips” and an update following the Government’s endorsement of electronic signatures and the Law Commission’s report on this point (see 7 Days).
The Law Society highlights that whether it is appropriate to use an electronic signature “may depend on any relevant legislation, regulatory requirements within the specific practice area and the type of document being signed or executed” (for example, the Land Registry has its own rules in relation to electronic signatures, and not all documents bearing an electronic signature are admissible for registration at Companies House). Given the complexity of the issue, schemes should seek legal advice before taking these routes.
On 6 May 2020, the ONS published its plans for data collection, compilation and publication of its various prices statistics (including RPI, CPI and CPIH), following restrictions as a result of the Coronavirus pandemic. This includes alternative methods of collecting price information where the usual process can’t be followed, for example where price collectors would usually visit outlets locally, or where goods or services are not currently available. The plan for consumer price statistics “will be carried out with immediate effect for the April index, with publication on 20 May 2020, and it will continue indefinitely until such time as it is considered safe to resume” the usual processes. The Bank of England has noted that, in its view, none of the planned temporary changes to RPI constitute “fundamental changes” to the coverage or basic calculation of RPI or are materially detrimental to the holders of certain relevant index-linked gilts.
On 6 May 2020, TPR updated its automatic enrolment and DC pension contributions: COVID-19 guidance for employers. This includes a new section on automatic enrolment duties for furloughed staff, noting that these duties “apply as normal”, and that employees should be assessed based on the amount of money they are being paid. It provides further explanation of how the automatic enrolment duties apply to furloughed employees in different circumstances, for example where pay has been reduced, where the employer has postponed enrolment, and where re-enrolment is required. The “Payroll processes and pension contributions” section has also been updated to clarify that payroll will run as normal (but, again, using the amount actually being paid).
TPO has upheld a complaint by a member who argued that, because his employer failed to alert him about changes to late retirement factors in good time, his retirement benefits were reduced.
For further detail, see our case report.