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
- Government publishes response to WPC report on pension scams
- PASA publishes GMP rectification guidance
- PPF publishes FCF Statement of Investment Principles
- TPAS dispute resolution function to move to TPO
- One million employers enrol staff into workplace pensions
- Pension scheme trustees fined and named for producing non-compliant documents
- Work and Pensions Committee warns of “another major mis-selling scandal”
On 12 February 2018, the DWP and HMT published the Government’s response to the Work and Pensions Select Committee’s report Protecting pensions against scams: priorities for the Financial Guidance and Claims Bill.
The Government states that it agrees with the WPC about the need to address the threat posed by pension scams, by cutting off scamming activity at the source to disrupt criminals and protect savers. It states that it “will continue to work swiftly to implement a cold calling ban by tabling a workable amendment to the Financial Guidance and Claims Bill, and then making regulations to introduce the ban”. A firm deadline is not, however, given.
The response also agrees about the need to ensure more people can benefit from guidance to enable them to make informed decisions about their personal finances and pension savings in particular. The Government therefore also states that it welcomes the WPC’s recommendation that the Financial Guidance and Claims Bill is amended to ensure that people either take or expressly refuse guidance before they can access their pension savings.
On 14 February 2018, PASA, the independent body dedicated to driving up standards in pensions administration, published a checklist for trustees undertaking GMP rectification.
PASA notes that “as schemes approach the end of reconciliation, there is a need to focus on the process of correcting GMP information on administration scheme databases and undertaking any rectification work required as a consequence”.
The checklist therefore covers the issues that may need to be considered and the questions that will need to be answered in order to complete the rectification process following a GMP reconciliation exercise.
It advises that the checklist should be reviewed and completed with reference to the existing PASA GMP Guidance.
The PPF has published a Statement of Investment Principles outlining the principles and policies governing determinations about investments made by or on behalf of the Board of the PPF in the management of the assets of the Fraud Compensation Fund (“FCF”).
TPAS’ dispute resolution function is moving to TPO, with the transfer of the TPAS dispute resolution team and volunteer network of over 350 advisers. The transfer is due to be completed by 1 April 2018.
The transfer is intended to simplify the customer journey. Customers will be able to access all pension dispute resolution, previously handled by two services, whether pre- or post-IDRP, in one place. TPAS will continue to focus on providing pension information and guidance, and will become an integral part of the new Single Financial Guidance Body.
Once the transfer is complete, schemes should ensure that their documentation and member communications signpost the new services correctly.
TPR’s most recent declaration of compliance report reveals that one million employers have now enrolled staff into a workplace pension, under the automatic enrolment regime.
Pension schemes that have produced non-compliant chair’s statements have been named for the first time by TPR. Lists published on 15 February 2018, accompanying TPR’s quarterly compliance and enforcement bulletin, include six pension schemes whose trustees have been fined for this offence. The professional trustees of the schemes are also named. TPR’s lists also include 29 employers taken to court in the quarter for failing to pay escalating penalty notices imposed because they failed to meet their automatic enrolment duties. The fines total more than £240,000.
Nicola Parish, TPR’s Executive Director of Frontline Regulation, said: “What some trustees put together as a chair’s statement is disappointing. These statements are important documents and should demonstrate to scheme members that the trustees are doing a good job and savers’ money is being well looked after. This is not just a tick box exercise. The chair’s statement should make declarations about key aspects of governance, from making sure a scheme’s costs and charges represent good value for money to assessing the skills and knowledge of trustees. A statement with little explanation offers no comfort to pension savers that their money is safe.”
The bulletin also highlights that there was a total of 28,446 cases of TPR’s enforcement powers being used in relation to automatic enrolment between October and December 2017. In the same period, TPR used its powers to enforce governance and administration rules against schemes 235 times, with 130 trustees appointed by TPR to schemes to ensure their proper administration.
The Work and Pensions Select Committee has published a report warning that “another major mis-selling scandal is already erupting” in relation to DB pension transfers, and calls on the responsible authorities to take urgent action.
The report is part of the WPC’s ongoing investigation into pension freedoms, and has been informed by the Committee’s investigations into the handling of the British Steel Pension Scheme.
The report cites research by the FCA, which showed that “only half of DB transfer advice nationwide meets its standards”. The WPC set out recommendations for the FCA and TPR, including that the FCA look to ban contingent charging, and create an online register of advisers and their current status in providing advice, and that TPR ensures all schemes “are equipped to give members of full picture of the options they are choosing between”.