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
- Consultation on draft Contracting-out (Transfer and Transfer Payment) (Amendment) Regulations 2017 published
- PPF publishes final levy determination for 2018/19
- FRC consults on levy
- HMRC pension schemes newsletter 94 published
- HMRC publishes Countdown Bulletin issue 31
- Investment Association launches public register of companies with significant shareholder rebellions
- PPI publish Briefing Note 104 – “Dependency on the State Pension through retirement”
- PPF announces new Chief Executive
Consultation on draft Contracting-out (Transfer and Transfer Payment) (Amendment) Regulations 2017 published
On 21 December 2017, the DWP published the draft Contracting-out (Transfer and Transfer Payment) (Amendment) Regulations 2018 for consultation. The draft regulations aim to enable bulk transfers of contracted-out (salary-related) rights to take place without member consent in some circumstances to schemes that have never been contracted-out. This has not been possible since the abolition of DB contracting-out.
Broadly, conditions of any transfer will be that the rights of members are not adversely affected, and that the same protections must be provided by the new scheme (for example, revaluation and indexation that would have been afforded to members if the transfer were to a formerly contracted-out scheme).
The consultation follows the DWP’s response to the 2017 consultation on the Contracting-out (Transfer and Transfer Payment) (Amendment) Regulations 2017. Technical changes were made in July 2017 regarding bulk transfers of contracted-out rights with consent.
The consultation runs until 17 January 2018, and the regulations are due to come into force on 6 April 2018.
On 19 December 2017, the PPF published its final levy rules for the 2018/19 levy year.
The PPF has made several changes to its bespoke insolvency risk model for the third triennium, including revisions to several scorecards and the adoption of alternative methods for assessing insolvency risk (such as the use of credit ratings) for certain employers to ensure they pay an appropriate levy.
The process for certifying deficit reduction contributions (“DRCs”) will be simplified for all schemes by the removal of the requirement for investment management expenses to be deducted when calculating the certified amount. An alternative methodology will be available to smaller schemes (those with submitted s179 liabilities of less than £10 million).
For the levy year 2018/19, trustees certifying / recertifying a Type A contingent asset which is likely to provide a levy reduction of £100,000 or more will, essentially, be required to obtain a guarantor strength report, prepared by a professional adviser, prior to certification.
The PPF expects to publish revised standard contingent asset forms, alongside final contingent asset guidance, in mid-January 2018. Assets agreed on / after publication must be on these new terms. Currently, the PPF anticipates requiring certain existing agreements to be re-executed in 2019/20.
For further information, please see our forthcoming Alert.
On 19 December 2017, the FRC issued its Budget and Levy Proposals for 2018/19 for consultation. The FRC has confirmed that it does not intend to increase the amount it raises through its insurance and pension levies compared with 2017/18.
The FRC pension levy now applies to all DB and DC schemes with 5,000 members or more. The levy rate will be confirmed in the first quarter of 2018, once the FRC has considered the data on scheme membership provided by TPR.
Pension schemes newsletter 94 was published by HMRC on 28 December 2017. Among other things, it includes:
- information on relief at source for Scottish Income Tax following measures announced in the Scottish Budget on 14 December 2017
- a reminder on declaration of annual allowance information via self-assessment tax returns
- a call for help from trustees and others with a drive to simplify pension language.
On 2 January 2018, HMRC published issue 31 of its “Countdown Bulletin”, which provides important information for schemes following the ending of contracting-out.
This latest edition of the bulletin includes information on scheme cessation guidelines and timelines.
Investment Association launches public register of companies with significant shareholder rebellions
On 19 December 2017, the Investment Association launched a public register of FTSE All-Share listed companies which have had significant shareholder rebellions. By publishing this information for the first time in one central location, the Register aims to increase transparency, accountability and scrutiny of listed companies by shareholders, media and the wider public.
The Register includes FTSE All-Share companies which have received votes of 20% or more against any resolution, or withdrew a resolution, prior to their AGMs in 2017. In 2017, over 22% of companies listed on the FTSE All-Share feature on the new Register. 38% of the resolutions listed on the Register were related to high votes against pay-related resolutions.
The Government announced that the Investment Association would oversee such a register in its response to the BEIS consultation on corporate governance reform in August 2017.
The PPI has published a Briefing Note which uses data from the English Longitudinal Study of Ageing to explore the role of the State Pension in people’s lives by measuring dependency (the proportion of income from the State Pension).
The PPF has announced the appointment of Oliver Morley as its new Chief Executive from 19 March 2018. The current Chief Executive, Alan Rubenstein, will be stepping down in early 2018.