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
- Consultation on changes to the LGPS published
- Pension Charges Bill 2017-19 introduced to Parliament
- TPR blogs on proposed DB funding changes timetable
On 8 May 2019, MHCLG published a consultation seeking views on policy proposals to amend the rules of the LGPS in England and Wales.
The consultation covers amendments to the local fund valuations (from the current three year to a four year cycle), and measures aimed at mitigating the risks of moving from one to the other; proposals for flexibility on exit payments, and proposals for policy changes to the employers required to offer LGPS membership, to reflect developments in the further and higher education sectors.
The consultation closes on 31 July 2019.
On 8 May 2019, the Pension Charges Bill 2017-19 had its first reading in the House of Commons.
The Bill is a private member’s bill, sponsored by Angela Eagle, the former Labour Minister of State for Pensions. The Bill is currently being prepared for publication, and a second reading date has not been set.
The aim of the Bill is “to require pension providers to publish standardised information on charges for pension products” and “to make provision for a cap on such charges”.
On 9 May 2019, TPR published a blog called “Protecting DB savers: our expectations are clear”, by David Fairs, TPR’s Executive Director of Regulatory Policy, Analysis and Advice. The blog addresses what TPR and the Government are “doing to make the funding standard for DB schemes clearer, and therefore provide better protection and outcomes for savers”. This follows the announcement of a range of measures in the White Paper, including changes to the legislation and a revised code of practice on DB funding, and the introduction of a DB statement “where trustees will be required to articulate their approach and decisions on funding and investments”.
The blogpost states that the concept of a long-term objective (“LTO”), and how trustees should achieve schemes’ Statutory Funding Objective in that context, will be at the heart of the revised code. The new code will aim to provide “a more straightforward, fast track route” to demonstrating compliance with funding requirements, but with scope for schemes to choose a more bespoke approach (subject to further evidence being provided and greater regulatory scrutiny.)
TPR plans to undertake two formal consultations. The first is expected this summer, “depending on the legislative timetable”, and will focus on “options for a clearer framework for DB funding”, including what TPR sees as a suitable LTO for both open and closed schemes. It is likely to cover journey plans and affordability; contingent support; recovery plan length, and investment strategy.
The second consultation on the draft code will take place in 2020, once TPR has “more clarity on the intended primary and secondary legislative package”.