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
- PDP consults on dashboards standards
- TPR updates initial guidance on dashboards
- Data Protection and Digital Information Bill introduced into Parliament
- DWP response to employer-related investments aspects of illiquid assets consultation
- DWP commits to consider stronger nudge exemption for AVCs and small hybrid DC pots
- TPO factsheet on approach to public service scheme age discrimination complaints
- Draft pensions tax legislation published
- TPR’s code of practice for CDC schemes made
PDP consults on dashboards standards
On 19 July 2022, the PDP published a consultation on draft standards, outlining how dashboard providers and pension providers must meet their legislative duties, as well as draft guidance on its approach to governing standards in the future. The PDP has also issued a call for input on the design standards, which will set out requirements for the presentation of data on dashboards and the general design of dashboards.
The consultation and call for input both close on 30 August 2022. The PDP is aiming to publish its final standards (other than the design standards) shortly after the final pensions dashboard regulations come into force, which is expected to be towards the end of this year.
See our Alert for more detail on the PDP’s consultation and call for input.
TPR updates initial guidance on dashboards
On 20 July 2022, TPR updated its initial guidance on pensions dashboards following the Government’s response to its consultation on the draft regulations (see our Alert for more detail on the consultation response).
The guidance reflects revised staging deadlines for the first two cohorts, among other updates, and includes a statement that matching, combining or comparing data from multiple sources requires a Data Protection Impact Assessment (DPIA) under the UK GDPR. Schemes may need to update their DPIA accordingly, or produce a DPIA if they do not already have one. We understand that the PDP and the DWP intend to publish their own DPIAs in connection with dashboards.
Data Protection and Digital Information Bill introduced into Parliament
On 20 July 2022, the Data Protection and Digital Information Bill was introduced into Parliament, following the Department for Digital, Culture, Media and Sport’s response to its consultation on proposed reforms of the UK’s data protection regime (see 7 Days).
The Government intends to update and simplify data protection requirements in the UK, introducing more flexibility, reducing burdens on organisations while still maintaining high data protection standards. The Bill sets out numerous measures relating to personal data and other information, including:
- reforming the ICO
- clarifying the rules on international transfers and cross-border transfers of personal data, and
- establishing a framework for the provision of digital verification services.
With data protection a key component of the upcoming pensions dashboard requirements, this is clearly one to watch.
DWP response to employer-related investments aspects of illiquid assets consultation
On 19 July 2022, the DWP published a response to Chapter 3 of its consultation on improving the accessibility of illiquid assets for DC scheme investment (see our Alert for details of the consultation). The response relates to the DWP’s proposals to amend the current restrictions on employer-related investments for authorised master trusts with 500 or more active participating employers, so that the restrictions do not apply in relation to each participating employer but instead to the scheme funder and scheme strategist (and persons connected or associated with them).
The responses to the consultation were largely supportive, and the DWP is taking forward its proposals with minor amendments to the draft regulations. The regulations have now been made and will come into force on 1 October 2022.
DWP commits to consider stronger nudge exemption for AVCs and small hybrid DC pots
Several schemes have engaged with the DWP to express concerns about the application of the stronger nudge to pensions guidance as it relates to AVCs and hybrid schemes where the majority of a member’s benefits are DB. In a letter to the WPC, published on 20 July 2022, the schemes confirmed that the DWP has committed to giving consideration to an additional exemption to cover AVCs and small hybrid DC pots following the collection of data on member reaction.
TPO factsheet on approach to public service scheme age discrimination complaints
On 20 July 2022, TPO published a factsheet detailing its approach to age discrimination complaints in public service schemes, following the McCloud judgment. TPO recognises the Government is taking steps to address the discrimination with retrospective effect, and schemes will need time to change their administrative systems and provide detailed information to members about their options.
Presently, therefore, TPO’s general starting position is that it will not investigate complaints or disputes relating to remedying age discrimination in public service schemes. However, it will look at the facts of each case before making any decision. TPO may still investigate where, for example, there are allegations of maladministration such as failure to explain what is going on and/or to engage properly with the member, or failure to provide interim arrangements to address instances of serious financial hardship or injustice within a reasonable period.
Draft pensions tax legislation published
On 20 July 2022, the Government published draft legislation and policy papers in connection with several pensions tax measures. The measures include a new system to make top-up payments to low earners contributing to “net pay” pension arrangements who do not receive the 20% tax relief which is automatically applied in “Relief at Source” pension arrangements. This policy was promised in the Autumn Budget 2021 (see 7 Days for more detail) and will take effect in the 2025-26 tax year in relation to contributions made from 2024-25 onwards.
Further draft legislation relates to the tax treatment of:
- payments made from CDC schemes in winding-up, with effect from 6 April 2023, and
- benefits which are reclaimed from the Dormant Assets Scheme, with effect from the date the Finance Bill 2022-23 receives Royal Assent.
These measures are summarised in HMRC’s Newsletter 141, published on 21 July 2022, which also contains updates on the Managing Pension Schemes service and Accounting for Tax returns (among other items).
TPR’s code of practice for CDC schemes made
On 18 July 2022, TPR’s CDC code of practice was made after being laid before Parliament (see 7 Days). The code will apply from 1 August 2022, when the regulations governing CDC schemes come into force.