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

Finance Bill 2019: pensions aspects

The draft Finance Bill 2019 has been published for consultation, and, as promised in the Autumn Budget 2017, contains provisions catering for the reform of employer contributions in relation to life assurance and overseas pension schemes.

Premiums paid by employers into life assurance products and contributions to QROPS are currently only tax exempted if the beneficiary is an employee or a member of the employee’s family or household. The proposed amendment, clause 5 of the draft Bill, will allow any individual or registered charity to be a beneficiary without the premiums being treated as a taxable benefit in kind.

The Government has published a policy paper and an explanatory note. The change is due to have effect from 6 April 2019.

Cold calling: update on the ban

On 12 July 2018, John Glen, Economic Secretary to the Treasury, made a Written Statement to both Houses of Parliament, confirming that a consultation seeking views on draft regulations to ban pensions cold calling would be published “imminently”.

The recent Financial Guidance and Claims Act 2018 provides for, among other things, protection against “unsolicited direct marketing relating to pensions”, and it was initially intended that regulations to make provision for the ban would be in place by the end of June 2018.

Mr Glen stated that the Government had “taken the time to ensure the ban works for consumers”. The intention now is that, following consultation, regulations will be laid in the Autumn and brought into force as soon as possible thereafter.

Call for evidence into use of the retail prices index

Following the launch of an inquiry into the use of RPI as a measure of inflation, the EAC’s call for evidence has been extended publicly. The deadline for the submission of evidence is 25 July 2018.

FRC releases updated Corporate Governance Code

Today, 16 July 2018, the FRC released the 2018 UK Corporate Governance Code, and Guidance on Board Effectiveness, following extensive consultation.

The FRC notes that aim of the new “shorter, sharper Code” is to put “the relationships between companies, shareholders and stakeholders at the heart of long-term sustainable growth in the UK economy”.

Briefing paper published

The House of Commons Library has published a briefing paper looking at the issues discussed in the DWP’s DB White Paper published in March 2018.

Insolvency Service bans directors of pension companies

Back in April 2017, the Insolvency Service reported that two pension companies, which administered and acted as trustees for various schemes, had been wound up in the public interest.

The Insolvency Service has now confirmed that four directors have received bans totaling 21 years for their roles in the companies’ mismanagement of members’ funds.

PASA launches Administration Governance Checklist for trustees

PASA has announced the publication of its Administration Governance Trustee Checklist. This has been developed in response to TPR’s drive to improve the governance of pension schemes, under its 21st Century Trusteeship initiative.

The checklist is intended to work as “an additional tool to help trustees to evidence and action appropriate levels of governance over their administration provider”.

PPF Annual Report and Accounts 2017/18 and Funding Strategy Update published

The PPF published its 2017/18 Annual Report and Accounts, together with its Long-term Funding Strategy Update, on 12 July 2018.

The report notes a “strengthened” funding position. PPF Chief Executive, Oliver Morley, said “The PPF remains resilient within a volatile economic landscape, and continues to provide valuable protection for 11 million pension scheme members… While we remain strong, we are not complacent. We remain focused on becoming more efficient and effective for our members and levy payers.”

PPI publishes second report on the evolving retirement landscape

The PPI has published the second report in a two-part series on “The evolving retirement landscape”. The report, “Evolving retirement outcomes”, looks to the future. It explores the potential outcomes that may be achieved through different retirement income decisions, and the changes that may need to occur within the industry and wider pensions landscape in order to ensure that these outcomes are positive for as many people as possible.

Pensions Ombudsman publishes Annual Report and Accounts 2017/18

TPO published its Annual Report and Accounts 2017/18 on 12 July 2018.

The report highlights the merger of TPO with TPAS’ dispute resolution team, and shows that it handled 6,319 enquiries, an increase of 5% from 2016/17.

TPR Annual Report and Accounts 2017/18 published

On 12 July 2018, TPR published its Annual Report and Accounts for 2017/18, outlining how TPR has performed against corporate priorities for the year, and setting out how it has “evolved into a more visible and proactive regulator and is working in a clearer, quicker and tougher way”.

The publication includes “examples of TPR’s work: how it has used certain powers for the first time as part of its tougher approach to schemes that do not act in the interests of members; its work around banking reform; and its programme to develop into a regulator fit for the evolving pensions landscape”.

TPR states that it achieved 18 of its 19 “key performance indicators”. In relation to the remaining KPI (5.1), which is to ensure that trustees and employers are clear on TPR’s expectations of them, it completed three out of five activities planned for the year. TPR’s guidance review was not started “due to resource pressures and conscious re-prioritisation”, whilst its operational implementation is now within the scope of TPR’s Future programme, and expected to be completed in the coming year.

TPR has published an accompanying blog by Mark Boyle, Chairman of TPR.

WPC calls on Government to enable CDC

The Work and Pensions Committee has called on the Government to move quickly to enable the creation of the UK’s first Collective Defined Contribution (“CDC”) pension scheme.

The WPC published its report and recommendations on 16 July 2018, as part of its inquiry into CDC schemes which launched at the end of 2017.