7 days

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

Bank of England and Financial Services Act 2016 (Commencement No 3) Regulations 2016 published

The Bank of England and Financial Services Act 2016 (Commencement No 3) Regulations 2016 were made on 7 June 2016.

These Regulations bring into force on 6 July 2016 certain provisions of the Bank of England and Financial Services Act 2016, including reforms relating to:

  • advice about transferring or otherwise dealing with annuity payments
  • independent advice on conversions and transfers of pensions benefits (appointed representatives)
  • early exit pension charges.

Company filing regulations made

On 6 June 2016, the Companies and Limited Liability Partnerships (Filing Requirements) Regulations 2016 were made. The regulations apply changes made by the Small Business, Enterprise and Employment Act 2015 to limited liability partnerships (LLPs) and unregistered companies, in relation to company filing. In particular, going forward:

  • unregistered companies and LLPs may now deliver a “confirmation statement” (in place of the requirement to submit an annual return) at least once in each 12 month period, stating that they have delivered all information required to be delivered to Companies House for the period covered by the statement
  • LLPs will be able to opt out of keeping their own register of members and register of members’ residential addresses, and to instead keep the information solely on the public register held at Companies House
  • the Registrar of Companies may omit the date of birth of the LLP’s members and persons with significant control from the information on the register available for public inspection.

Made on the same day, The Registrar of Companies (Fees) (Amendment) Regulations 2016 create consequential changes to filing fees.

Both sets of regulations are due to come into force on 30 June 2016.

House of Commons Library publishes briefing paper on pensions increases

The House of Commons Library published a briefing paper on 8 June 2016, which looks at the requirements on private sector DB occupational pension schemes to index and revalue pension benefits.

It also considers the current consultation on the British Steel Pension Scheme (“the Scheme”), which, among other things, considers amending the Scheme’s rules in order to reduce the levels of indexation and revaluation payable on future payment of accrued pension rights (to the minimum level required by law), and reviews some of the public comments on this consultation.

PLSA’s DB Taskforce opens call for evidence

On 9 June 2016, the PLSA’s “DB Taskforce” opened a call for evidence in relation to the challenges facing DB schemes and potential solutions.

The PLSA’s press release states that “DB schemes are swimming against the economic and social tide in order to make sure members’ benefits are paid”, with deficits close to £300bn despite record levels of employer and employee contributions.

The Taskforce notes three possible areas in which solutions to sustainability may lie – efficiency, capital allocation and member benefits.

Ashok Gupta, Chair of the Taskforce, commented that it is “increasingly clear that even for closed schemes to survive a radical re-appraisal of how they operate is needed. That is an extremely complex task as DB schemes are different things to different people”. The PLSA is therefore calling for input from all areas – from scheme members through to trustees, sponsors, think tanks, regulators and Government.

The call for evidence closes on 15 July 2016, with interim findings due to be presented at the PLSA’s annual conference in October 2016.

Ombudsman sets out new approach in published decisions

On 8 June 2016 the PO announced that it had changed its approach to publishing decisions.

Going forward, the PO Service will publish opinions issued by its adjudicators (alongside the usual determinations), where they have been appealed to the PO or Deputy PO, or are otherwise considered to be of interest. The PO cites by way of example, that an opinion of interest “might be one where an administration error occurred and as a result the scheme noticed similar errors were occurring as it was systematic and changed their procedure accordingly.”

The PO is also now anonymising all new published decisions. Generally, the name of the person making the complaint, as well as any other identifying personal data, will be removed, unless deemed essential for understanding the decision.

Examples of when a decision may not be anonymised include where the case is particularly notable with wider public interest implications, where the PO is setting a precedent, or where the name of the person making the complaint is actually relevant to the issue.

Claire Ryan, Legal Director at the PO Service said, “The publication of a wider range of our decisions reinforces our intention to be open, transparent and accountable to the public. Our new policy on anonymisation reflects the prevailing approach of dispute handling schemes towards increased protection of personal information, while maintaining transparency in demonstrating our work and findings and giving guidance to the industry and consumers.”

PPF Strategic Plan 2016 published

The PPF has published its Strategic Plan 2016, which sets out “how the PPF intends to meet its business objectives over the next three years and to provide the security that the 11 million people we protect deserve”.

The Plan highlights the risks the PPF faces, while noting that its strong balance sheet and current modelling continues to indicate that its funding strategy remains on track.

PPI issues Briefing Note 82

The PPI released its latest Briefing Note (82) on “Lifetime ISAs – the international evidence”, on 13 June 2016.

This report, commissioned by Royal London, and following on from a round table discussion on the subject, looks at other countries where pension saving and early access are combined, drawing out pertinent lessons for the UK’s Lifetime ISA.

TPR urges public service schemes to prepare for their scheme return

TPR issued a press release on 8 June 2016, calling on public service pension scheme managers to prepare for and submit their annual scheme return or risk being fined for failing to comply with the law.

Later this month, TPR will issue scheme return notices to scheme managers of the UK’s 210 public service pension schemes, which provide pensions for more than 13.7 million people. For the first time, these have been specifically designed for public service schemes.

Andrew Warwick-Thompson, Executive Director for Regulatory Policy, noted the guidance and assistance available to schemes on TPR’s website, and said: “We expect one hundred percent compliance in this area and for scheme managers of all schemes to meet their legal duties. We will act where scheme managers fail to meet even the basic ‘hygiene’ duty of completing a scheme return.”

Once they have received their return notice, schemes will have six weeks to complete and return them to TPR.

The Girls’ Day School Trust v GDST Pension Trustees Ltd & Anor

In this case the judge permitted rectification by summary judgment where it was clear that the parties had mistakenly executed the wrong version of a trust deed and rules.

Please see our case report for further details.