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

Briefing papers published

On 12 October 2021, the House of Lords Library published a briefing paper summarising the background and content of the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (see 7 Days), as well as outlining the upcoming stages of the Bill scheduled to take place on 19 October 2021.

On 11 October 2021, the House of Commons Library updated a briefing paper which looks at the framework within which LGPS funds in England and Wales make investment decisions, and how they can and should take into account environmental, social and governance issues, including the risks and opportunities associated with climate change and investment in infrastructure.

DHSC publish consultation on changes to NHS Pension Scheme member contributions

On 15 October 2021, the Department of Health and Social Care (“DHSC”) published a consultation seeking views on proposals for a new member contribution structure in the NHS Pension Scheme which will be implemented from 1 April 2022. The proposal includes basing members’ contribution rates on their actual annual salaries and reducing the cross-subsidy between higher and lower earners. The consultation closes on 7 January 2022.

DWP updates consultation on changes to the notifiable events regime

On 13 October 2021, the DWP updated its consultation seeking views on changes to the notifiable events regime (see our Alert). The update has been made to the way “relevant security” is defined in the consultation, to ensure consistency with the definition in the associated draft Pensions Regulator (Notifiable Events) (Amendment) Regulations 2021.

FCA speech on partnerships, priorities and predictions for future in pensions market

On 14 October 2021, the FCA published a speech by Sarah Pritchard, the FCA’s new Executive Director for Markets, on “partnerships, priorities and predictions” for the future in the pensions market. Key comments include:

  • that effective pensions regulation “relies on deep partnership between the many regulators and policy makers that operate in the pensions space”
  • the FCA’s three main priorities are “focusing on advice and guidance for consumers; seeing that pension products are well designed and represent value for money; and making the pensions market work well, without scams”
  • the FCA is “already changing to become a more innovative, assertive and adaptive regulator, reflecting the world [it] operate[s] in, and will continue to do so in the months and years ahead”.

The speech sets out recent and forthcoming changes aimed at meeting the FCA’s priorities.

HMRC Countdown Bulletin 56

On 11 October 2021, HMRC published Countdown Bulletin 56 which has updates on:

  • the delayed closure of Scheme Cessation and Scheme Reconciliation eRooms, and
  • raising queries with HMRC.

PDP publish response to staging call for input

On 13 October 2021, the PDP published a summary of the key themes drawn from responses to its call for input to inform staging policy development (see 7 Days and our consultation response). The responses indicated a need for greater clarity surrounding the proposals, in particular on scheme size bandings and the digital architecture’s technical requirements. The staging proposition will be set out in the DWP’s consultation on draft regulations for occupational pension schemes, expected at the end of 2021, and in the FCA’s consultation on draft rules for providers of personal and stakeholder pensions, which will follow.

PLSA updates “Retirement Living Standards” to reflect lockdown lifestyle changes

On 12 October 2021, the PLSA announced it has updated its “Retirement Living Standards” for the first time since they were established (see 7 Days), as a result of changing lifestyles in the wake of the COVID-19 pandemic. Like the CPI measure of inflation, the Retirement Living Standards are “regularly reviewed to ensure they keep up with changes in spending habits as well as changes to prices on the shelves to remain relevant to real world retirement spending”. The changes include “more money for eating out, a higher personal grooming budget and the inclusion of a Netflix subscription”.

Nigel Peaple, Director of Policy and Advocacy at the PLSA, commented: “We hope the updated Standards will encourage people to think about whether they are saving enough for the retirement lifestyle they want and, in particular, whether they are making the most of the employer contributions on offer in their workplace pension… The pandemic has emphasised the importance of economic security as well as social and cultural participation in retirement.”

PLSA publishes case studies on meeting climate goals

On 14 October 2021, the PLSA published a series of real-world case studies demonstrating how workplace pension providers are putting their climate policies into action. The publication is aimed at helping pension funds learn from others’ experiences and sets out practical examples on how to meet a range of regulatory challenges and investment ambitions.

Nigel Peaple, Director of Policy and Advocacy at the PLSA, said: “The pension sector is united in its desire to tackle climate change and, in advance of new TCFD requirements, large pension schemes are already assessing the impact of their investments in order to adopt strategies which will help to reduce climate change and achieve the goals of the Paris agreement. Our new guide, Towards a Greener Future, sets out case studies on how pension schemes and providers are approaching this issue in practical terms. Many of these are from schemes that have been leading the way on investing in a climate-aware way. This is a complex area, and we hope that pensions trustees and schemes find our new guide useful whatever the stage they are up to in dealing with climate change.”

TPO publishes guidance on communicating with members

On 14 October 2021, TPO published guidance outlining its views on best practice for communicating with pension scheme members. It covers feedback on enquiries and complaints it has received and directs readers to a new section on TPO’s website, “How to avoid the Ombudsman”. This contains key guidance, case-studies on common themes in member complaints and links to key determinations. The section includes information on the following:

  • guidance on the best way to communicate with customers
  • how TPO determines distress and inconvenience awards, including case studies on awards in cases of unpaid contributions, death benefits and failure to provide information
  • how TPO’s early resolution service can help by providing an informal method of dispute resolution
  • what is involved in ill-health and death benefit complaints and what issues TPO will look at, including case studies and links to key determinations
  • how TPO will deal with complaints of unpaid pension contributions.

The guidance also includes tips on how best to avoid ending up in front of TPO, such as using plain English when communicating, clarifying what outcome the member wants, making sure members receive up-to-date information that is accurate, clear and concise, avoiding delays in complying with internal policies or service level agreements and explaining delays to members.