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

Multi-employer schemes and employer debt: new consultation, and response to call for evidence

On 21 April 2017, the DWP published a consultation seeking views on the draft Occupational Pension Schemes (Employer Debt) (Amendment) Regulations 2017.

The regulations introduce a new option that is designed to enable employers in multi-employer pension schemes to defer the requirement to pay an employer debt on ceasing to employ an active member. The deferred debt arrangement will be subject to a condition that the employer retains all their previous responsibilities to the scheme.

The regulations also include separate provisions to address some situations where two successive employment-cessation events occur in respect of the same employer and changes to existing options that are already in place to help employers manage an employer debt.

The consultation document also includes the Government’s response to the call for evidence on Section 75 employer debt in non-associated multi-employer defined benefit pension schemes which was originally published in March 2015.

The consultation runs until 18 May 2018.

Please see our forthcoming Alert for further details.

HMRC publishes “new regime” ROPS notification list

On 18 April 2017, HMRC published its latest list of recognised overseas pension schemes.  This followed the temporary suspension of the list from 14 April 2017 to allow consolidation and updating of the list following changes to the regime announced at the Spring Budget.

The list now contains only those schemes that have given a new undertaking to HMRC that they will operate the overseas transfer charge legislated for in the forthcoming Finance Bill. The list is therefore currently significantly shorter than before, but can be expected to grow. The list will be suspended again between 2 and 5 June 2017 to allow for further updating.

HMRC publishes additional information on Pension Tax for overseas pensions

On 20 April 2017, HMRC published additional guidance for pension providers about the tax changes to Section 615 schemes from 6 April 2017.

This supplements the guidance given in Pension Tax for overseas pensions, which had given information in relation to the changes to the conditions to be an ‘overseas pension scheme’ and a ‘recognised overseas pension scheme’.

HMRC Pension schemes newsletter 86 published

Pension schemes newsletter 86 was published by HMRC on 21 April 2017. Amongst other things, it:

  • clarifies HMRC’s “technical understanding” of the rules on “in specie contributions” to registered pension schemes
  • issues a reminders about Relief at Source applications
  • draws attention to the new forms available to help scheme administrators and trustees meet their information obligations on taxable lump sum death benefits paid to trusts
  • provides information on lifetime allowance services
  • links to updated PTM guidance on the scope of mandatory scheme pays.

TPR corporate plan published

On 21 April 2017, TPR published its corporate plan for 2017-2020.

The plan lists eight priorities, down from ten in its current plan, with the aim of being “clearer and more specifically focused to meet its statutory objectives in the changing pensions and risk landscape”:

  • successfully completing the remaining stages of the roll-out of automatic enrolment to small and micro employers
  • delivering more interventions, more quickly, where DB schemes are underfunded or avoidance is suspected
  • protecting customers through the effective regulation of master trusts
  • driving up standards of record-keeping and data maintenance, including in public service schemes
  • being clearer in its codes, guidance and other interactions with schemes and employers about what it expects them to do
  • driving up standards of trusteeship across all schemes, with a particular focus on chairs and professional trustees
  • developing and implementing its enhanced approach to regulation
  • creating high performing teams of people across TPR with the skills and capabilities to deliver all of the above.

TPR Chief Executive Lesley Titcomb said: “These priorities show how we are evolving to become a bolder, more effective regulator. Going forward we will be intervening more frequently and acting faster. […] Effective regulation is essential to protect the benefits of members of occupational pension schemes and in recent months we have demonstrated we will use the powers available to us.”

The corporate plan also confirms that TPR has sought additional funding from DWP “to address key challenges that have arisen in a number of areas”, including preparing and implementing the new master trust regime, increasing frontline resources to undertake higher volumes of casework more quickly and proactively, and in developing an enhanced approach to regulation. An additional £3.5m has therefore been included in the levy budget in 2017-18, £6m in 2018-19 and £5.4m in 2019-20 to fund this work.