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
- APPT code of practice for sole trustees
- Further lockdown, and extension of CJRS
- DWP “stronger nudge to pensions guidance”
- DWP Pension Freedoms study published
- HMRC publishes pension schemes newsletter 125
- HMT publishes exit payment guidance
- New Government briefing papers
- PDP publishes dashboards timeline and report
On 27 October 2020, the Association of Professional Pension Trustees (“APPT”) launched a new code of practice setting out “rigorous new standards for professional trustees carrying out sole trustee appointments”.
Developed in consultation with TPR, the code of practice for Professional Corporate Sole Trustees sets out a range of governance and risk controls that sole trustee firms must adhere to in order to ensure that members’ interests are properly protected. The new code “bolsters the APPT’s existing professional standards code” which all accredited professional pension trustees must follow (see 7 Days), and comes into force on 1 January 2021.
On 31 October 2020, the Government announced that a new period of lockdown is to commence on 5 November and run until 2 December 2020 (currently). In line with this, the Coronavirus Job Retention Scheme (“CJRS” or “Furlough” scheme) is to be extended “until December”.
Under the extended scheme, the cost for employers of retaining workers will be reduced, meaning that the “extended furlough scheme is more generous for employers than it was in October”: businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover NICs and employer pension contributions (see our Timeline).
The Job Support Scheme (see 7 Days) which was scheduled to come into force on 1 November 2020 has been postponed until the furlough scheme ends.
On 28 October 2020, the DWP published a “statement of policy intent” setting out proposed measures to encourage beneficiaries to access “appropriate pensions guidance” (via Pension Wise), with the aim of helping them make informed decisions and avoid scams.
Trustees will be required to “nudge” beneficiaries to guidance when they seek to access their pension through the retirement freedoms, and to ensure the member has either taken or actively opted out of taking guidance. Schemes will have “flexibility to choose a process that works best for them and their members” but be required “to take proactive steps to facilitate appointments for their members and to present taking guidance as a natural part of the process of accessing pension savings”.
Draft regulations for occupational schemes (which will commence the relevant sections of the Financial Guidance and Claims Act 2018) will be published for consultation. The Government “expects” that TPR will provide guidance for trustees and managers to support them to implement these changes. The FCA will also consult on rules for contract-based pensions “in due course”.
On 28 October 2020, the DWP published a research study examining the behaviours of individuals with DC savings in respect of decumulation decisions, accessing support and retirement planning. The study “will support wider work to inform policy decisions relating to planning and preparing for later life” and inform future policy on advice and guidance (as it provides further understanding of how individuals go about accessing information, the types of information that inform decision making and individuals’ level of engagement with their pension pots).
HMRC published pension schemes newsletter 125 on 30 October 2020. Amongst other things, the newsletter contains a reminder of the expiry of easements in relation to re-employment in response to the coronavirus outbreak (see 7 Days).
Amongst other reminders and notes on time limits, it contains information on submitting relief at source declarations, the expiry of Government Gateway login credentials, and pension flexibility and registration statistics.
The guidance and directions sets out the obligations on individuals and employers, and the waiver process for payments over £95,000.
The House of Commons Library has published:
- a new briefing paper on the Pension Schemes Bill (see our Alert), which is due to reach Committee stage this week
- an updated briefing on the PPF, which provides an overview of how the PPF operates, how it is funded and current debates associated with the PPF, including in relation to the Hughes and Hampshire cases and their appeals (see 7 Days).
On 28 October 2020, the Pensions Dashboard Programme (“PDP”) published its second Progress Update Report (following April’s initial report – see 7 Days), which summarises the steps the PDP has now taken in developing the dashboard project.
It also sets out a timeline for the development of the dashboards:
- an initial version of the proposed data standards for dashboard providers is due in December 2020
- the PDP is working with the DWP and the FCA on developing draft regulations and rules that will be made once the relevant provisions in the Pension Schemes Bill are enacted. (Discussions are also under way between the DWP, the FCA and HMT regarding the creation of a new regulated activity of “providing a dashboard”, though this may be finalised after the DWP regulations have been agreed)
- phase one (“programme set-up and planning”) is currently under way. From 2021, phase two – “develop and test” – will start, with the “building, integration and testing of the digital architecture”. From 2022, phase three “voluntary onboarding and ongoing testing” will begin, connecting volunteer pension schemes and providers to the dashboard using real data. Phase four, including mandatory “staged onboarding and dashboards available point”, will run from 2023. The start date for the final phase (where the dashboards are “business as usual”) is yet to be determined.
The PDP has also released a summary of findings from a Call for Input on data standards (see 7 Days), as well as qualitative research undertaken with pension providers and schemes to understand the potential data issues different types of providers and schemes may face when integrating with the pensions dashboards ecosystem.