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
- ABI publishes recommendations for pensions dashboards
- DWP publishes report on automatic enrolment experience among small and micro employers
- FRC issues advice for preparing 2017/18 annual reports
- HMRC publishes Trusts Registration Service FAQs
- HMRC publishes Countdown Bulletin issue 29
- IFoA publishes third bulletin on intergenerational fairness
- PASA highlights need for trustees to adopt Biometrics
- PLSA launches consultation to improve UK’s retirement outcomes
- PPI publishes report on international comparison of employer and employee contributions to DC pensions
- TPR launches new online messaging on scams
On 12 October 2017, the ABI published a paper entitled “Pensions Dashboard Project – Reconnecting people with their pensions”, setting out a “roadmap of what needs to be done to give everyone in the UK online access to all of their pension information”. In doing so, it also called for “firm Government direction on its plans for pensions dashboards”.
The dashboard project group, managed by the ABI and including 16 contributors as well as the PLSA, oversaw the launch of the prototype earlier in 2017, and is now setting out its recommendations for what should happen next. It states that the key objective is that consumers “should have a right to access information about all of their pensions in one place of their choice in a standardised digital format, [through] regulated services”.
Steps to achieve this, as outlined in the report, include:
- legislation to ensure all pension providers and schemes make data (ie pension savings information) available
- an implementation timetable, and an implementation and governance body which will establish the necessary standards for all involved
- establishing a non-commercial, Government backed platform which will operate alongside services from third parties.
Yvonne Braun, ABI Director of Policy, Long-term Savings and Protection, said “For such a service to succeed it needs to be as comprehensive as possible, as soon as possible, and anything which involves people’s life savings must be effectively regulated. We need a clear timetable for implementation and legislation so we can turn this great concept into a genuine public service.”
The PLSA commented that the dashboard must be “well regulated and underpinned with good governance to ensure savers are given the same data wherever they look”, ideally through FCA regulation and an independent governance entity accountable to Parliament. The PLSA also recommend that the anticipated Single Financial Guidance Body hosts one dashboard, “in order for savers to have access to one trusted and commercially neutral option”.
On 15 October 2017, the DWP published a report, “Automatic enrolment: Qualitative research with small and micro employers”. It explores small and micro employers’ and workers’ experiences of automatic enrolment, its impact upon them, and the main drivers of opt-out amongst their employees.
The DWP commissioned the first automatic enrolment research study in 2012 to explore the impact on large employers, and subsequently a second study in 2014 involving medium-sized employers. The research detailed in this report is the third study, commissioned in 2016.
The research findings will be used to:
- build an understanding of the impact of automatic enrolment on small and micro employers, to inform and improve the design and delivery of the policy
- inform the DWP’s wider evaluation of automatic enrolment, including in annual reports and the upcoming results from the 2017 review of automatic enrolment.
On 10 October 2017 the FRC wrote to companies to highlight changes to reporting requirements and key areas where improvements can be made when preparing annual reports for the 2017/18 reporting season.
The FRC’s letter draws companies’ attention to particular areas of investor focus, including pensions. It notes that “continued low interest rates and the economics of [DB] pension arrangements have increased the need for companies to improve the transparency regarding their pension arrangements. Pension disclosures should provide sufficient transparency of the nature and risks to which the schemes expose the company, including informative explanations of deficit funding arrangements, risk management strategies and scheme assets.”
The FRC has carried out a thematic review on this topic which will be published in Q4 2017.
In the wake of the new anti-money laundering regulations coming into force, HMRC has published detailed guidance relating to the new online Trusts Registration Service, in the form of Frequently Asked Questions. The guidance contains information relevant to registering occupational pension schemes.
We are seeking clarification from HMRC on some points of the guidance, and will issue an Alert once we have received a response.
On 12 October 2017, HMRC published issue 29 of its “Countdown Bulletin”, which provides important information about the ending of DB contracting-out.
This latest edition of the bulletin includes information on Termination and Transfer notices, and on the automated solution where there is a discrepancy between a scheme’s “Start Date” and “End Date”.
On 12 October 2017, the IFoA published the third and final bulletin in its series on intergenerational fairness.
The bulletin seeks to inform the debate around health and social care by looking at the way some of the issues can be seen through “an intergenerational lens”. The bulletin also considers the way that the ageing population will change the structure of the UK’s workforce.
PASA has issued a press release emphasising that the use and development of Biometrics must be higher on trustees’ agendas, “if schemes are to drive efficiency and continue meeting member needs in the long term”. Biometric technology involves the use of unique features, such as someone’s voice, fingerprints or iris, allowing individuals to be electronically identified.
Margaret Snowdon, Chair of PASA, commented “Inevitably there may be objections from some trustees who are reluctant to adopt a new method of identification because they feel requesting certificates is safe and fool proof – plus some administrators may not be willing to commit to the investment required for the new technology. Biometrics offer a whole new way to engage members and as the trend towards financial technology continues to grow, these changes are inevitable. As an industry, we should be embracing this new opportunity and focus our efforts on making it a success.”
On 11 October 2017, the PLSA launched a consultation entitled “Hitting the Target – Delivering Better Retirement Outcomes” designed to help people define and meet their retirement goals.
The consultation will look at the development of a set of new national retirement income targets, and what changes to the current retirement saving system would make this possible. National Retirement Income Targets, which are currently used in Australia, provide savers with tangible income goals which take into account what they need to save in order to achieve different standards of living in retirement (minimum, modest and comfortable). The PLSA will also be engaging with Government as part of the process.
According to the PLSA’s research, only 16% of people say they know how much they would need to save to achieve the standard of living they hope for in retirement. As part of the consultation further in-depth analysis will be undertaken to determine exact income levels and the PLSA welcomes views from interested parties.
PPI publishes report on international comparison of employer and employee contributions to DC pensions
On 13 October 2017, the PPI published a paper, commissioned by NOW: Pensions, exploring different factors related to, and country experiences of, employer/employee contribution balances.
The report, Who pays the piper?, compares the UK to countries that have nationwide automatic enrolment schemes (Italy and New Zealand), as well as other countries where DC schemes operate outside of automatic enrolment (Japan and Denmark).
TPR has launched new online messaging urging consumers to keep their eyes and ears open for pension scams.
One of the new pieces of animation being circulated by TPR via Facebook, Twitter and YouTube reminds viewers to watch out for scam sites that dress themselves up with anti-scam messaging to pose as legitimate businesses. The second focuses on the need to hang up immediately on pension cold callers.
Mike Broomfield, TPR’s Head of Intelligence, said “scammers are always developing new ways to try to get their hands on people’s pensions so everyone needs to be on the look out for potential traps. […] We need consumers to help us find and stop scams. We can all use our eyes and ears to spot the scammers before they can profit at our expense.”