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
- Removing the LTA: Finance Bill 2023-24 clauses published
- TPR updates pensions dashboards guidance on failing to comply with duties
- Government publishes responses to consultations on McCloud retrospective remedy
- TPO restores services after cyber incident
Following on from pension tax changes introduced by the Finance (No. 2) Act 2023, draft clauses for the next Finance Bill to deal with abolishing the LTA from 6 April 2024 were published on 18 July 2023. The Government proposes replacing the LTA regime with a new “lump sum allowance” and an overall “lump sum and death benefit allowance” set by reference to the current LTA. Much of the draft clauses focus on how member and death benefit lump sums will be taxed after the LTA regime is removed, with some detail left to regulations.
HMRC and HMT are running a technical consultation on the draft clauses, which closes on 12 September 2023. This aims to ensure the legislation works as intended, although the consultation notes that the “final contents of the next Finance Bill will be a decision for the Chancellor”.
See our Alert for more details.
TPR has made a further update to its dashboards guidance following the Government’s announcement of the “reset” timeline. Under the new timeline, all schemes in scope must connect by 31 October 2026, and a revised staging timeline will be set out in guidance which trustees and scheme managers must “have regard to”.
TPR expects trustees to demonstrate how they have had regard to the guidance, including by not making final decisions about connecting without having “engaged with the guidance”, and clearly considering and documenting the reasoning for their decisions.
Schemes are expected to be contacted by TPR “to make clear to them what their date is” and steps they must take to have regard to the guidance. TPR may use its enforcement powers if schemes cannot demonstrate compliance.
On 19 July 2023, the Government published responses to the consultations carried out earlier this year on implementing the retrospective part of the McCloud remedy in the Police Pension Scheme and the Firefighters’ Pension Scheme. The remedy will be implemented in relation to each scheme from 1 October 2023.
On 18 July 2023, regulations were made to provide for McCloud compensation payments to be free of Class 1 national insurance contributions, as well as income tax.