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
- Equitable Life announcement
- DWP announces reappointment of DPO
- PPI publishes report on the evolving retirement landscape
- Updated version of pension scams code published
- Trustee suspended after police investigation launched into pension fraud
- Government response to report on pension freedoms published
Equitable Life has announced that it has agreed to transfer the Society and all its policies to Reliance Life, an agreement which it believes will both secure, and enhance, the capital distribution currently given when with-profits policy benefits are taken (from the current 35% to a level expected to be between 60% and 70%). The announcement will be of interest to all pension schemes that hold Equitable Life policies.
With-profits policyholders will be asked to vote on the proposal before it can go ahead. An Independent Expert’s report will be made available to policyholders beforehand.
The vote is not likely to take place before mid-2019, and the proposal will then be put before a High Court judge for approval. There is no action for policyholders to take now, with more information expected to be provided in October 2018. Equitable Life has provided a Q&A for members.
The DWP announced on 21 June 2018 that Karen Johnston has been reappointed as Deputy Pensions Ombudsman for a further two years. Following on from the conclusion of her initial three-year term, Ms Johnston’s reappointment will begin on 1 July 2018.
The PPI has published the first report in a two-part series on “The evolving retirement landscape”. The report explores the ways in which the retirement landscape has changed since the freedoms were introduced and what this might mean for future retirees.
On 22 June 2018, the Pension Scams Industry Group (“PSIG”) published a second version of its Code of Practice on combating pension scams. The guidance, which does not have a statutory basis, aims to “share good practice and help reduce the risk of successful scams”.
The original code was published in 2015, and has been updated “because of the changing nature of pension scams, the introduction of pension freedoms and the clarification in law of the statutory right to transfer”. The updated Code applies to all transfer requests processed on or after 22 June, and “will be reviewed and updated on a regular basis to ensure it reflects current risks and good practice”.
On 20 June 2018, TPR reported that it had suspended a pension scheme trustee after detectives launched a fraud investigation.
TPR’s Determinations Panel decided that it was “overwhelmingly in the interests of scheme members and for the protection of scheme assets” for Gordon Craig to be suspended from acting as a trustee on any scheme while the police investigation continues. Alongside concerns over potential liberation activities, the panel also believed that the trustees had breached their duties “by keeping poor records and having limited knowledge of how the pension scheme should have operated”.
An independent trustee was appointed to the Optimum Retirement Benefits Plan to act in place of Mr Craig and the other trustees to the scheme, a move which is intended to protect other pension holders by preventing them from transferring their funds into the scheme.
On 22 June 2018, the Work and Pensions Committee published the Government’s response to its Ninth Report of Session 2017-19 on pension freedoms. The document sets out the Government’s response to each of the recommendations made by the WPC in turn.
Amongst other things, the WPC report called for a “default decumulation pathway”. The Government, however, has stated in its response that “there is insufficient evidence to suggest a common default pathway would be suitable for the majority of people at this time”. The PLSA has called on the Government to reconsider this decision.