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

Dormant Assets Bill introduced to Parliament

The Dormant Assets Bill, as announced in the Queen’s Speech, had its first reading in the House of Lords on 12 May 2021 and its second is due on 26 May. This Bill expands the Dormant Assets Scheme (“the Scheme”) in relation to certain pension and long-term insurance assets, and contains a power to extend the Scheme in future to cover new dormant assets.

Factsheets on the Bill confirm, amongst other things, that customers will always remain able to reclaim what they would have been owed had their assets not been transferred into the Scheme, and list resources for those trying to trace their dormant assets. The Scheme remains voluntary for businesses, both as to whether they choose to join and how much they transfer.

DWP publish consultation on permitted charges within DC pension schemes

On 24 May 2021, the DWP published a consultation on the Government’s proposal to move to a single, permitted universal charging structure for use within qualifying DC schemes for AE, to “protect individuals … from high and unfair charges and from the risk of erosion to their pension savings from such fees”.

In the January response to the Review of the Default Fund Charge Cap and Standardised Cost Disclosure (see 7 Days), the DWP set out its intention to introduce a de minimis pot size, initially set at £100, below which flat fees cannot be charged in default funds (a percentage of funds under management charge can still be charged on all pots, irrespective of their size).  This latest consultation seeks views on the implementation of this de minimis, and the proposed legislation, which is anticipated to come into force in April 2022.

The consultation also seeks views on the “broader direction [the DWP] should take on the future structure of charges that are permitted within the charge cap”.

A response on the consultation regarding performance fees is still awaited.

The consultation closes on 16 July 2021.

Data sharing code of practice laid before Parliament

The ICO has confirmed that its new data sharing code of practice was laid before Parliament on 18 May 2021 and, in the absence of any objections, will come into force after 40 sitting days. The code aims to guide organisations through the practical steps they need to take to share data lawfully and “to give businesses and organisations the confidence to share data in a fair, safe and transparent way”. Further resources and practical tools on sharing data are available on the ICO’s data sharing information hub (see 7 Days).

PASA re-establishes e-Admin working group

PASA has announced the re-establishment of its e-Admin working group (“EAWG”) whose purpose is “to create clear guidance on ‘what good looks like’ in terms of eAdministration for members, trustees and administrators of pension schemes”.

The EAWG will work alongside other PASA Working Groups on data management, identity management and cybercrime. Amongst other things, in the short term it plans to publish a “jargon buster” (to explain the acronyms most commonly used in technology and examples of how new technology is being used in pensions and the broader financial landscape), and guidance on the “admin journey”.

PLSA to launch LGPS research project

On 18 May 2021, the PLSA announced the launch of a new research project to identify best practice and future challenges for the LGPS. The research aims to develop a comprehensive understanding of the major issues and challenges facing the operation of the LGPS and to identify where additional clarity is needed from guidance from regulators and the Government, and how the scheme may evolve in the future.

PPI announces development of a Pensions Framework

On 17 May 2021, the Pensions Policy Institute (“PPI”) announced plans to develop a UK “Pensions Framework”, noting that several frameworks exist to evaluate and compare international pension systems but that, at present, “no single model can consistently capture the impact of changes to policy and policy levers over time, and the way in which critical factors interact to determine pension outcomes”. The aim of the framework is to “support future policy analysis and decision-making by tracking trends and examining change in the context of key objectives including adequacy, sustainability and fairness”. The framework will be developed over the course of 2021 in collaboration with independent experts, policy advisers and other key stakeholders.

TPR and FCA launch consultation on consumer pensions journey

On 18 May 2021, TPR and the FCA launched a joint call for input asking the pensions industry how consumers make decisions about their pension at key points throughout their working lives.

The call for input notes that since the introduction of AE in 2012 there has been a “seismic shift in the pensions landscape” away from DB schemes towards saving into DC schemes, transferring the risk and much of the responsibility for retirement outcomes to the consumer. The call for input therefore seeks to gather information on what influences consumers at different stages of their lives and how they can be better supported to achieve improved pensions outcomes. The insights gathered will inform policy making and help shape future regulatory interventions.

This work will sit alongside the introduction of simpler annual benefit statements (see our Alert) and Pensions Dashboards, and the work of the Small Pension Pots Working Group.

Responses should be submitted by 30 June 2021.

TPR podcast on challenges and opportunities facing the pensions industry

On 17 May 2021, TPR published a podcast in its series “TPR Talks”. Among other things, the podcast discusses rights of workers in the gig economy, confirming that TPR has been “engaging closely” with Uber following the ruling by the Supreme Court (see our case report) and calling on other organisations in the gig economy to engage with the issue.

TPR publishes new Corporate Plan 2021-24

On 19 May 2021, TPR published its new three-year Corporate Plan which outlines how it aims to deliver against the five strategic priorities (security, value for money, scrutiny of decision-making (see also above, on the Call for Input), embracing innovation, and bold and effective regulation) set out in its recently published long-term Corporate Strategy (see 7 Days).

Priorities for the next three years include implementing the Pension Schemes Act 2021, combatting scams and developing a framework for measuring value for money, as well as supporting scheme trustees, employers and savers in the recovery from the COVID-19 pandemic. The plan details the main areas of focus under each strategic priority for the first year of the plan, and sets out key performance indicators and details on its structure and resource allocation.