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
- BEIS consultation on the quality and effectiveness of audit
- FCA publishes consultation on extending remit of IGCs
- Government returns to its plan to cap public sector exit payments
- Money and Pensions Service launches and consults
- Pension Transfer Gold Standard launched
- PPF publishes Strategic Plan 2019-2022
- TPO publishes factsheet on status as a “competent court”
On 10 April 2019, BEIS published a call for views on the quality and effectiveness of audit, asking for feedback from interested parties, including pension funds and their members.
This follows BEIS’ December 2018 announcement of an independent review into the quality and effectiveness of the UK audit market (the “Brydon Review into UK Audit Standards”), as part of the Government’s wider package of corporate governance reforms.
The consultation closes on 7 June 2019.
Today, 15 April 2019, the FCA published a consultation paper on rules to extend the remit of Independent Governance Committees (“IGCs”).
The proposed extensions are new duties for IGCs:
- to report on their firm’s policies on ESG issues, consumer concerns and stewardship, for the products that IGCs oversee (related guidance for providers of pension products and investment-based life insurance products is also proposed). The FCA’s proposals address recommendations made by the Law Commission in its June 2017 report on Pension Funds and Social Investment
- to exercise independent oversight of the value for money of their firm’s investment pathway solutions for pension drawdown (following on from its January 2019 consultation).
The paper also discusses what the FCA has seen in published IGC annual reports and from its engagement with IGCs, inviting views on issues relevant to its planned work with TPR on value for money in pensions.
The consultation closes on 15 July 2019.
On 10 April 2019, HMT published for consultation draft Restriction of Public Sector Exit Payments Regulations 2019 and a schedule (setting out the proposed scope of the regulations), which would introduce a £95,000 cap on exit payments, along with draft guidance and Treasury directions. The consultation closes on 3 July 2019.
The Government originally legislated to allow a cap on public sector exit payments in the Small Business, Enterprise and Employment Act 2015 (as amended in 2017 by the Enterprise Act 2016), which introduced a duty to implement the cap through secondary legislation. However, draft regulations published in 2016 were not progressed. The new draft regulations differ from the previous proposals in certain respects, including in relation to proposed exemptions.
On 8 April 2019, the Money and Pensions Service (“MAPS” – formerly the Single Financial Guidance Body) announced its official launch. It is consulting until 30 June 2019 on its strategy, and will publish a National Strategy and three-year Corporate Plan in Autumn 2019.
Among other things, MAPS will investigate “different approaches for defaulting pension holders into guidance at the point they seek to access or transfer their pension savings”. This will contribute to the evidence for making the rules on referring pension scheme members to financial guidance required by the Financial Guidance and Claims Act 2018.
Its business plan for 2019-20 notes that this is a “transition year”, during which the Pension Wise, TPAS and MAS brands will remain as points of entry. The aim is to have a new MAPS customer website live towards the end of 2019.
On 9 April 2019, the Pensions Advice Taskforce launched the “Pension Transfer Gold Standard”, a voluntary code of good practice for financial advisers, in relation to safeguarded and DB transfers, based around nine key principles.
The Gold Standard’s Consumer Guide is due to be released later this month, and is designed as a tool “to give members confidence that their adviser has their best interests at heart”.
Margaret Snowdon, Sponsor of PASA’s DB Transfers Working Group, described the code as a “vital step forward in helping members build a better understanding of what good advice looks like and where to find it”.
On 9 April 2019, the PPF published its Strategic Plan for 2019-2022, which sets out the organisation’s vision, its strategic priorities (including innovation, and the development of digital technologies), and how it intends to meet its objectives, over the next three years.
The PPF states that it aims to “remain prudent and maintain its current funding strategy and low risk investment approach over the course of the Strategic Plan to ensure there will be sufficient revenue and reserves to take on large schemes with significant deficits without risk to members.”
Supporting the plan, the PPF has published for the first time its Business Plan as a separate document, identifying the fund’s key milestones and planned activities for the next 12 months.
On 11 April 2019, TPO published a factsheet in response to Mr Justice Arnold’s comments in Burgess v BIC UK Ltd, setting out its view that the Ombudsman is a “competent court” for the purpose of the Pensions Act 1995, when making Determinations for recoupment in overpayment cases.
The factsheet gives a “non-exhaustive list of reasons why the Pensions Ombudsman considers he is a ‘competent court’”, and states that the judge’s comments are to be regarded as obiter, being a provisional view on the matter, which did not form part of his judgment on the issues before him: “The court did not have the benefit of hearing full legal arguments on the issue, including from the Pensions Ombudsman himself, who was not a party in the appeal.”