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
- Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2021
- Social Security Benefits Up-rating Order and Regulations 2021
- Briefing papers published
- BEIS consults on reforms to the audit and corporate governance regime
- DWP announces funding for mid-life MOT trials
- DWP launches consultation on draft regulations concerning TPR’s contribution notices and information gathering powers
- DWP launches consultation on incorporating performance fees within the charge cap
- European Commission proposes to extend EMIR clearing exemption for pension scheme arrangements
- HMRC confirms deadline extension for Trust Registration Service
- HMRC newsletter on Managing Pension Schemes Service
- NAO publishes report into public service pensions
- MaPS to launch single consumer service
- TPO publishes information on panels and independent financial advisers
- TPR issues consultation on draft single code of practice
- TPR publish annual report on UK defined benefit and hybrid schemes
The Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2021 was made on 15 March 2021 and comes into force on 6 April 2021. The Order sets out revised amounts for the 2021/22 tax year for the upper and lower thresholds of the AE qualifying earnings band and for the AE earnings trigger.
The Government’s review of the levels for 2021/22 was published on 20 January 2021 and concluded that the earnings trigger will remain at £10,000, while the qualifying earnings lower limit will be £6,240 and the upper limit will be £50,270 (in line with the lower and upper earnings limits for NICs) (see 7 Days).
The Social Security Benefits Up-rating Regulations 2021 were made on 15 March 2021, giving full effect to the 2021 up-rating exercise set out in the Social Security Benefits Up-rating Order 2021 under which the Secretary of State reviews the rates of social security benefits and provides for the up-rating of certain benefits. The Order comes into force partly on 1, 4, 5, 6, 12 and 15 April 2021, and fully on 10 May 2021.
The House of Commons Library has published the following:
- a briefing paper which looks at the LTA and AA
- a briefing paper which looks at some of the FAQs constituents raise with their MPs about the State pension
On 18 March 2021, BEIS launched a consultation on the Government’s proposals to “restore trust in audit and corporate governance”. The proposals, which respond to the Kingman, CMA, and Brydon reviews, set out how companies should report on their governance and finances, how reports should be audited, how audit and the audit market should change and how these should be overseen by a new regulator.
The consultation will close on 8 July 2021.
On 18 March 2021, the DWP announced a £400,000 funding boost for organisations that help people take stock of their health, skills and wealth as part of later life planning. The new funding will be given to ten “local enterprise partnerships” to develop and trial locally-led “mid-life MOTs” (see 7 Days). The aim is to help the DWP understand the actions individuals take as a result of undertaking the MOT, the user needs among those most at risk of experiencing long term unemployment, and the effectiveness of using local delivery channels and how these can complement MaPS, the National Careers Service and Public Health England in supporting individuals with later life planning.
DWP launches consultation on draft regulations concerning TPR’s contribution notices and information-gathering powers
On 18 March 2021, the DWP launched a consultation on the proposed drafting of two sets of regulations concerning the powers of TPR to issue contribution notices and gather information, following changes introduced by the Pension Schemes Act 2021:
- The Pensions Regulator (Contribution Notices) (Amendment) Regulations 2021 outline the rationale and suggested approach for the “employer resources test”
- The Pensions Regulator (Information Gathering Powers and Miscellaneous Amendments) Regulations 2021 set out the information that interview notices should contain, modify how inspection powers may be utilised in multi-employer schemes, and set out the fixed and escalating penalty rates for non-compliance with information-gathering requests.
The consultation period runs until 29 April 2021 and the Government aims to publish its response to the consultation within 12 weeks. The new regulations, together with TPR’s corresponding new powers under the Pension Schemes Act 2021, are expected to come into force in October 2021.
On 19 March 2021, the DWP launched a consultation on proposed measures to allow occupational DC schemes to smooth performance fees within the charge cap, and a call for evidence on “look-through” in relation to charge cap compliance. This consultation was pre-announced at the Budget 2021 and follows on from the September 2020 consultation “Improving outcomes for members of defined contribution schemes” (see our Alert). This new consultation contains the Government’s response to the performance fee section of the September 2020 consultation, and consults on consequential draft regulations which are intended to enable the diversification of DC investment portfolios.
This consultation closes on 16 April 2021 and the Government aims to publish a response to this consultation alongside a response to the remainder of the September 2020 consultation, including final draft regulations and final statutory guidance, in June 2021.
See our Alert for further detail.
On 16 March 2021, the European Commission published for consultation a draft Delegated Regulation extending the temporary exemption from the clearing obligation for pension scheme arrangements (“PSAs”) meeting certain criteria.
Currently, PSAs benefit from a temporary exemption from the clearing obligation under EMIR (see 7 Days), which has been extended over the years. The European Commission is proposing to further extend the exemption by one year, until 18 June 2022. It has requested feedback on the draft Delegated Regulation by 13 April 2021.
On 15 March 2021, the Chartered Institute of Taxation reported HMRC’s announcement that the deadline for registration of the trusts required to register under the Fifth Money Laundering Directive (see 7 Days) has been extended until summer 2022. HMRC confirmed that the IT system to administer the registrations will open in summer 2021, rather than March 2021 as originally planned. The legislation will be amended to provide a period of approximately 12 months for registration from the date when the IT system opens. Further updates and clarification from HMRC will be provided in due course.
On 16 March 2021, HMRC issued its latest newsletter updating stakeholders on issues in relation to the management and registration of pension schemes. The newsletter includes information on registration and enrolment for pension scheme practitioners, existing practitioner authorisations, accessing a locked Accounting for Tax Return, migration to the Managing Pension Schemes service, detail on signing in to online services and an update on pension scheme accounting.
On 18 March 2021, MaPS announced plans to launch a new consumer service to replace the three legacy brands of MAS, TPAS and Pension Wise. “MoneyHelper”, a single service providing money and pensions guidance over the phone, online and face-to-face, will be launched this summer. Pension Wise, which provides guidance for people aged 50 and over about their pension options, will continue as a named service under the MoneyHelper umbrella.
MaPS is working with stakeholders across the UK to ensure that they are ready to signpost to MoneyHelper services and content when the brand begins to be rolled out from early June 2021. A toolkit and guide for stakeholders will also be produced to facilitate the changeover to MoneyHelper.
The National Audit Office has published a report covering the changes to the public service pensions landscape since the 2011 Hutton Review. The report provides background on public service pensions, outlines recent long-term trends in pension costs and benefits and future projections, and highlights future challenges including the effect of recent cases.
On 18 March 2021, TPO published a document entitled “Panels and Independent Financial Advisers”, which gives “generic information and guidance” on its approach to the provision of factual information in respect of IFAs. TPO covers the considerations that must be borne in mind where schemes do decide to provide members with a list of IFAs, its expectations, and the potential risks (including where processes are not sufficient in the selection and monitoring of that list). Schemes contemplating taking this path should ensure they have reviewed the guidance document.
On 17 March 2021, TPR launched a consultation on the first phase of its work, bringing together 10 of its 15 current codes in 51 new “modules” (and in doing so, reducing its page count for these by nearly half). Calling for industry views on its efforts to create “a clearer, more accessible single code of practice”, the consultation runs until 26 May 2021.
A key change is that governance expectations have been updated to reflect the Occupational Pension Schemes (Governance) (Amendment) Regulations 2018, which were designed to implement certain requirements of the second European Pensions Directive, better known as IORP II (see our Alert).
Further modules of TPR’s current codes will be consulted on, and its guidance generally reviewed, in due course.
See our Alert for further detail.
On 16 March 2021, TPR published its annual report on UK DB and hybrid schemes, using data submitted via the scheme return and effective as at 31 March 2020. The report offers information and analysis on scheme status and memberships, funding regimes and public service DB schemes.