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
- New legislation published
- Public service pensions legislation published
- ABI Framework for the Management of “Gone-Away” Customers
- HMRC pension schemes newsletter 96 published
- HMRC’s guidance on tapered annual allowance updated
- PLSA publishes “Made Simple” guides
- Healthcare company admits to misleading TPR
- TPR appoints Executive Director for Regulatory Policy, Analysis and Advice
- WPC recommendations incorporated in Financial Guidance and Claims Bill
The following pieces of legislation, all of which come into force on 6 April 2018, have been published:
- the Guaranteed Minimum Pensions Increase Order 2018 was laid before Parliament on 5 March 2018, and specifies the amount by which the GMP element of an individual’s occupational pension entitlement must be increased – 3.0% for the tax year 2018/19
- the Social Security Revaluation of Earnings Factors Order 2018 was also laid before Parliament on 5 March 2018. The Order sets the rate for revaluing deferred GMPs in formerly contracted-out DB schemes, in line with the movement in average earnings. This is set at 3%, reflecting the increase in average earnings in Great Britain in the year to September 2017
- the Social Security Benefits Up-rating Order 2018 was made on 6 March 2018. Amongst other things, it confirms the increase in the full state pension from £159.55 to £164.35 – a rise of 3%, in line with the “triple lock” (the Government’s current commitment to raise the state pension in line with the higher of prices, earnings or 2.5%). The Social Security Benefits Up-rating Regulations 2018, made on 8 March 2018, contain provisions necessary to give full effect to this 2018 up-rating exercise
- the Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2018 were made on 8 March 2018, and will increase certain NIC rates, thresholds and limits, for the purpose of calculating NIC liabilities.
The Pensions Increase (Review) Order 2018 was laid before Parliament on 9 March 2018. It provides for increases in the rates of public service pensions. The Public Service Pensions Revaluation Order 2018 was laid on the same date, and provides for public service pension revaluation in deferment.
HMT have published updated multiplier tables to help scheme administrators correctly apply the annual increase to public service pensions in 2018, taking into account increases from previous years. A covering note gives details. Public service pensions which have been in payment for a year will be increased by 3% from 9 April 2018 in line with the September-to-September increase in CPI.
On 7 March 2018, the Association of British Insurers (“ABI”) published its “Framework for the Management of ‘Gone-Away’ Customers in the Life and Pensions Market” (the “Framework”). The Framework is designed to help firms operating in the life and long-term savings market to better identify, trace, verify and manage those customers with whom they have lost contact, to assist them in reengaging with such customers in a timely manner. It sets out principles, supported by illustrative examples of activities and practices, for providers to consider when making decisions about how to avoid losing contact with customers.
In its press release, the ABI states that the Framework is particularly important in light of the Government’s recent recommendation that insurance and pension products should be moved into the remit of the dormant assets scheme
The Framework references the FCA’s December 2016 guidance on the fair treatment of long-standing customers in the life insurance sector. The ABI will review the Framework in April 2019.
Pension schemes newsletter 96 was published by HMRC on 6 March 2018. Among other things, it includes information on:
- the Scottish Budget 2017, and a reminder of the new Scottish Income Tax rates and bands applying from 6 April 2018
- Relief at Source, annual return of individual information, residency status and excess relief
- the new pensions online service
- reporting of non-taxable death benefits.
In addition, various HMRC Relief at Source documents have been updated (in relation to claiming too much relief at source), including its guidance for pension scheme administrators, information on informing HMRC of excess tax reclaims, and relevant forms.
HMRC’s guidance “Pension schemes: work out your reduced (tapered) annual allowance”, has been updated, with the latest version containing instructions for DB and career average schemes.
The PLSA launched two new “Made Simple” guides at its investment conference in March:
- Impact Investing Made Simple, which explains the key aspects of integrating environmental, social and governance (“ESG”) considerations into investing practices, looking at a range of ESG strategies and the importance of impact investing as a driver of future growth
- Global Securities Fraud Litigation Made Simple, which sets out an overview of the opportunities available to investors for pursuing claims against publicly traded companies acting in breach of anti-fraud laws.
A healthcare company and its managing director have pleaded guilty to misleading TPR about providing their staff with a workplace pension. The company had submitted a declaration of compliance in relation to its automatic enrolment obligations. However, the employer had not completed the setting up of a pension scheme, had not automatically enrolled any staff and had not written to its staff to tell them about automatic enrolment. No pension contributions had been paid.
Knowingly or recklessly providing false information to TPR is an offence under section 80 of the Pensions Act 2004. Wilfully failing to comply with automatic enrolment duties is an offence under section 45 of the Pensions Act 2008. Both charges carry a maximum sentence in a magistrates’ court of an unlimited fine.
The case has been adjourned for sentencing until May.
TPR has announced the appointment of David Fairs as its Executive Director for Regulatory Policy, Analysis and Advice. He will take up the post from July 2018.
In advance of the Commons Report Stage of the Financial Guidance and Claims Bill (today, 12 March 2018), the Government has tabled amendments which take forward key recommendations of the Work and Pensions Committee aimed at protecting pensioners against scams and boosting take-up of free independent pensions guidance.
The Government’s proposed amendments make provision for a ban on pensions cold calling to be put in place by June 2018. The proposal aligns with the Committee’s recommended amendment on pension cold calls set out in its Protecting pensions against scams: priorities for the Financial Guidance and Claims Bill report, and follows the Government’s response to that report.
Further amendments relating to the provision of pension guidance echo WPC recommendations. The explanatory statement indicates the Government’s intention is that this guidance will be provided by the new Single Financial Guidance Body.