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
- MaPS publishes statistics on awareness of death benefits
- HMT launches call for evidence on pension fund clearing exemption
- DWP updates forms for tracing and letter forwarding service
- FSCS confirms final levy for 2023/24 and 2024/25 forecast
MaPS published the results of a survey on awareness of pension death benefits on 9 November 2023. The survey of over 2,500 UK adults with a pension found that more than half of respondents “don’t know what happens to their pension when they die”, with only two in five knowing that pensions could go to their nominated beneficiary. Releasing the statistics for Talk Money Week 2023, MaPS encourages members to check their nominated beneficiary to make sure they have named the people they want to receive any death benefits.
On 13 November 2023, HMT published a call for evidence on the temporary exemption for certain pension fund transactions from the mandatory clearing obligation under the UK European Market Infrastructure Regulation.
The exemption was made in recognition that clearing contracts through a central counterparty, which typically requires collateral to be provided in cash, could cause particular challenges for pension funds. It has been extended several times and is currently due to expire on 18 June 2025.
The call for evidence is part of a review which aims to consider and implement a longer-term policy approach, and responses will help inform the final policy decision. It closes on 5 January 2024.
The DWP published updated forms and guidance for its “Pensions and insurance tracing and Bulk Letter Forwarding” service on 8 November 2023. The service enables letters containing beneficial information about pensions or insurance policies to be forwarded on to members or beneficiaries who trustees and pension providers cannot trace. The DWP expects the service to be a last resort, after “every effort” has been made to trace the person concerned.
On 9 November 2023, in the November 2023 edition of its Outlook newsletter, the FSCS published details of its final levy for 2023/24 and forecast levy for 2024/25. The levy is paid by firms authorised by the FCA and PRA, and funds the cost of running the FSCS.
The levy for 2023/24 is £270 million and the FSCS is unlikely to need to request additional levies for the remainder of the 2023/24 year. It expects to have some surplus balances at the end of March 2024 which will be used to offset the levy for firms in 2024/25.
The initial levy forecast for 2024/25 is £415 million. This figure is an early indication and subject to change, and is currently based on predicted compensation costs of around £457 million in the 2024/25 financial year.