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
- Finance Bill 2019 published
- The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018
- Consultation: delivering CDC schemes
- HMRC consultation on legislation relating to repayment of the overseas transfer charge
- Cost Transparency Initiative launches
- Review of exemptions from paying charges to the ICO – response published
- TPR’s new website goes live
- Barnardo’s v Buckinghamshire (Supreme Court – 7 November 2018)
- O’Brien v Ministry of Justice (CJEU – 7 November 2018)
Amongst other things, it contains provisions relating to premiums paid by employers into life assurance products and contributions to qualifying recognised overseas pension schemes (“QROPS”). The Government announced in the Autumn Budget 2017 that this relief would be amended and that legislation would be introduced in the next Finance Bill. Draft legislation on this issue was first published in July 2018 and there have been no changes to it in the interim. The provisions are due to have effect from 6 April 2019.
The Bill will receive its second reading today, 12 November 2018.
The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 were made on 6 November 2018.
The regulations create a “temporary permissions regime”, under which EEA firms currently operating in the UK under an EEA financial services passport are granted UK authorisation for a limited time until the PRA and the FCA determine their applications for UK authorisation. The regulations also remove references in UK law to the provisions that implement the EEA financial services passport.
The regulations came into force on 7 November 2018, with the exception of certain provisions which will come into force on “exit day”.
On 6 November 2018, the DWP published its consultation on “Delivering collective defined contribution pension schemes”.
The consultation sets out the Government’s proposals as to how a particular form of collective defined contribution (“CDC”) scheme might work in the UK.
For further detail please see our Alert.
Since 9 March 2017, a 25% overseas transfer charge is deducted from transfers of UK pension savings to QROPS, except in set circumstances.
On 12 November 2018, HMRC published two sets of draft regulations and a draft explanatory memorandum for consultation:
- the draft Pension Schemes (Information Requirements – Repayment of Overseas Transfer Charge) Regulations 2019 detail the conditions and process for claiming a repayment of the overseas transfer charge, where the charge was either paid in error or a change in the individual’s circumstances means the original transfer was exempt from the charge
- the draft Pension Schemes (Information Requirements – Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) (Amendment) Regulations 2018 aim to align existing QROPS information requirements with those detailed in the draft Repayment of Overseas Transfer Charge regulations.
Both instruments are due to have effect from 24 April 2019. Once the regulations are in force, guidance on the detailed process for claiming and reporting repayments of an overseas transfer charge will be included in HMRC’s Pensions Tax Manual.
On 7 November 2018, the Cost Transparency Initiative (“CTI”) was launched. The CTI is an independent group aiming to improve cost transparency for institutional investors. It also has responsibility for progressing the work already undertaken by the Institutional Disclosure Working Group (“IDWG”), which was itself set up, as part of the Asset Management Market Study remedies package, to support consistent and standardised disclosure of costs and charges to institutional investors.
At the same time, the IDWG report to the FCA has also been published. Its recommendations include detail of five templates designed to cover the costs associated with investing in various asset classes.
The CTI is supported by the PLSA, the Investment Association and the LGPS Advisory Board, and was recommended as part of the IDWG’s report to the FCA on 15 June 2018. Part of the CTI’s work will be to implement, promote and encourage use of the new cost transparency templates (available from its website) across the pensions and investment industries. Over the coming months, the group plans to run a pilot with a number of schemes and asset managers to test the templates and associated technical and communication materials.
As the Data Protection (Charges and Information) Regulations 2018 were originally drafted, “small occupational pension schemes” (defined as schemes with fewer than 12 members) that were not subject to an exemption were only to be liable to pay the tier 1 fee, regardless of size or turnover.
The Government has considered responses to the question of whether this tiering was acceptable, but does not consider there to be significant evidence that small occupational pension schemes should pay a higher charge to the ICO. It therefore considers that automatic classification to the lowest tier is correct.
TPR’s updated website, featuring its new branding, has gone live. TPR states that, “following extensive audience research, the website has been modernised to be more usable and is particularly optimised for use with mobile and tablet devices. The new site is a key part of TPR’s redesigned branding which highlights how the organisation is changing its approach to become clearer, quicker and tougher.”
We are aware that, as a result of the update, some links to pages on the original website are not currently working.
The Supreme Court has rejected Barnardo’s appeal confirming that the trustees did not have power to select the index by reference to which increases to pensions in payment (“indexation”) and to deferred pensions (“revaluation”) would be calculated.
For further detail please see our case report.
The CJEU has ruled that periods of service completed prior to the deadline for the transposition of the Framework Agreement on part-time work (Council Directive 97/81/EC) (“the Directive”) should be taken into account when calculating the pension entitlement of a part-time worker.
For further detail please see our case report.