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
- Insolvency regulations
- DDCMS consultation into proposed data protection reform
- DWP consultation on notifiable events regime
- Government suspends state pension triple lock for 2022/23
- PPF compensation cap decision will not be appealed
- TPR updates on AE powers usage
The Corporate Insolvency and Governance Act 2020 (see our Alert) included temporary measures intended to provide businesses with protection during national COVID-19 restrictions. Those temporary rules have been extended on two occasions and are set to expire on 30 September (see 7 Days). However, temporary tapering measures are being introduced with effect from 1 October (see below)
The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 were made on 8 September 2021 and come into force on 1 October 2021. This instrument will replace the temporary moratorium rules for England and Wales by incorporating permanent rules for the moratorium into the Insolvency (England and Wales) Rules 2016, so that procedural rules for all corporate insolvency procedures are contained in one instrument.
Following feedback from users of the temporary rules the opportunity has been taken to improve the operation of the moratorium by making some policy changes (including, for example, referencing “business days” rather than “days”).
The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021 were also made on 8 September 2021 and come into force on 29 September 2021. These regulations introduce temporary insolvency measures restricting the use of winding up petitions with effect from 1 October 2021 until 31 March 2022. These temporary measures are intended to create a tapering effect when the current temporary insolvency measures expire at the end of September. The aim is that businesses can “get back to normal without facing a “cliff edge” following withdrawal of the current provisions”. The Government will keep these temporary measures under constant review whilst they remain in force, given that they “are a significant intervention into the normal working of insolvency law, in particular the rights of creditors”.
On 9 September 2021, the DDCMS launched a consultation on reforms to the UK’s data protection regime. According to the accompanying press release, the Government wants to “create a pro-growth and trusted data regime” and “to remove unnecessary barriers to responsible data use”.
Described as “the first step in the process of reforming the UK’s regime for the protection of personal data”, the proposals “build on the key elements” of the UK GDPR.
The consultation closes on 19 November 2021.
On 8 September 2021, the DWP published a consultation seeking views on changes to the notifiable events regime. The draft regulations introduce two new notifiable events, focusing on material sales and granting or extending certain security. Acknowledging its ineffectiveness, given that a director is unlikely to admit to it, the draft regulations will also remove the existing requirement to notify TPR of wrongful trading.
In addition, the Government confirmed that it would introduce a new “Declaration of Intent” to be provided to TPR in relation to certain events.
The changes are expected to come into force in 2022.
See our Alert for further detail.
On 7 September 2021, the Government confirmed that the triple lock mechanism for annual state pension increases will be suspended for 2022/23. The Social Security (Up-rating of Benefits) Bill, introduced in the House of Commons on 8 September 2021, will ensure the basic and new State Pensions increase by the higher of 2.5% or inflation, and set aside the earnings element.
This is in response to “an irregular statistical spike in earnings over the uprating review period” resulting from the lifting of restrictions imposed due to the COVID-19 pandemic. The growth in earnings for the period is estimated to be between 8% and 8.5%. According to the Government’s press release, this would mean a “difference of around £4 or 5 billion in basic and new State Pensions expenditure in 2022/23”. The Government has confirmed that this new legislation is a “one-year response to exceptional circumstances” and that it plans to return the earnings element of the triple lock the following year.
In an update on its website, the PPF has announced that the DWP has confirmed that it will not appeal the July Hughes judgment in relation to its compensation cap. In that judgment, the Court of Appeal ruled that the PPF’s approach to increasing compensation following a CJEU decision is lawful, but that the imposition of the compensation cap constitutes unlawful age discrimination. The PPF has confirmed it will continue to pay members their current level of benefits until it has planned its implementation of the judgement.
On 9 September 2021, TPR published its latest compliance and enforcement bulletin which sets out the enforcement activity carried out between January and June 2021. The overall use of TPR’s AE powers has returned to pre-pandemic levels “following necessary measures introduced last spring to support employers through the early months of the crisis”. TPR’s accompanying press release warns employers not to neglect their workplace pensions duties as the economy recovers, noting that TPR continues “to closely monitor compliance and use its powers where necessary to ensure employers remain on track.”
Recently published DWP statistics also show trends in pension contributions remained relatively stable over the COVID-19 period and employee contribution rates, which slightly reduced in early 2020, have returned to pre-pandemic levels.