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

TPR publishes its annual funding statement

TPR’s latest annual funding statement was published on 27 April 2023. Key points include:

  • funding positions of DB schemes have improved in general, but TPR stresses the importance of avoiding “complacency” when monitoring the employer’s covenant
  • if trustees have not yet agreed a long-term funding target, they should do so “as a priority”
  • schemes whose funding levels have fallen may need to reset their funding and investment strategies to meet their long-term targets.

See our Alert for more detail.

HMRC publishes pension schemes newsletter with updates on Spring Budget tax changes

HMRC published its latest pension schemes newsletter on 26 April 2023. Following emails to stakeholders, it confirms that schemes may continue to use the current process for taxation of DB lump sum death benefits or uncrystallised funds lump sum death benefits. This process will continue until a longer-term position is developed for the full abolition of the lifetime allowance from 6 April 2024.

HMRC’s annual allowance calculator is being updated for the Spring Budget tax changes. It is currently unavailable for the 2023/24 tax year, and expected to be available from summer 2023.

Pension scheme exemption to clearing obligation extended to June 2025

The temporary exemption for certain pension fund transactions from the mandatory clearing obligation under the UK European Market Infrastructure Regulation will be extended by a further two years to 18 June 2025. HMT will conduct a review of the exemption ahead of its expiry.

FCA publishes webpage on accepting pension transfer referrals from overseas advisers

On 27 April 2023, the FCA published a webpage highlighting the increased risks to consumers when overseas financial advisers refer DB scheme members to UK financial advisers to transfer their DB pension to an alternative arrangement. The page includes a useful summary of how this process typically works.

UK advisers engaging with overseas firms or offering advice to scheme members based outside the UK are reminded to have regard to their regulatory responsibilities, including the consumer duty. Pension scheme trustees must comply with separate duties in relation to transfers.