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
- Further Pension Schemes Act 2021 commencement regulations published
- Briefing paper on the Public Service Pensions and Judicial Offices Bill published
- HMRC publishes newsletter 132
- TPO publishes Corporate Plan 2021–24
- TPR publishes automatic enrolment reminder blog
- TPR publish interim response to the consultation on TPR’s new code of practice
- UK unveils post-Brexit global data plans
On 24 August, the Pension Schemes Act 2021 (Commencement No 3 and Transitional and Saving Provisions) Regulations 2021 were made.
The regulations bring into force (at 1 October 2021) provisions relating to the extension of TPR’s powers (see our Alert) including those relating to contribution notices, TPR’s information-gathering powers and the new £1 million financial penalty.
The regulations also contain transitional provisions, including ones which clarify the application of the new powers where an act, failure to act or course of conduct occurred (or started) before 1 October 2021.
The regulations also contain saving provisions to:
- enable the penalties under section 10 of PA95 to continue to apply in relation to non-compliance with notifiable events duties arising before 1 October 2021
- enable sections 72(1A) and (1B) of PA04 (provision of information to TPR) to continue to have effect after their repeal where a notice to attend an interview has been issued and the duty imposed has not yet been discharged
- ensure the meaning of “administration charge” in the PSA17 continues to have effect until amendments are made under the PSA21 (this will fall away on 5 April 2022). A regulation-making power in relation to changes to the definition of administration charges comes into force today, 31 August 2021.
The House of Lords Library has published a briefing paper looking at the Public Service Pensions and Judicial Offices Bill which is designed, amongst other things, to remedy discrimination identified in public sector schemes (see 7 Days).
The Bill is scheduled to have its second reading on 7 September 2021.
On 27 August 2021, HMRC published pension schemes newsletter 132, which covers:
- relief at source: a reminder of key dates including the cut off for returns of information, and an update on reporting excess relief
- AA: a reminder of the cut off for issuing pensions savings statements for the last tax year
- pension scheme migration, including viewing pension schemes that require migration, and reporting wound up pension schemes.
On 23 August, TPO published its Corporate Plan 2021–24, which outlines its strategic direction for the next three years and priorities for the current year. TPO highlights the challenge of continuing to meet the “long-term trend of increasing demand without a corresponding increase in resource”, noting that “the demand is likely to increase further as the full impact of the Covid-19 pandemic on the economy and people’s changing financial circumstances evolves”.
In particular, TPO expects complaints relating to the furlough scheme and its ending as well as “a much larger scale” of maladministration complaints relating to the non-payment of AE contributions, and increased complaints as new regulations under the PSA21 give trustees power to block transfers where a scam is suspected (see our Alert). TPO also notes that the introduction of the pensions dashboard will raise people’s awareness of pensions which may increase demand on its services.
On 26 August 2021, Mel Charles, Director of Automatic Enrolment at TPR, published a blogpost warning employers not to neglect their automatic enrolment duties.
It notes that TPR is “now taking stock of our new normal and the challenges ahead” as it emerges from a “tumultuous 18 months”, and, while businesses “have been impacted in a myriad of different ways and face unique challenges”, it warns that the industry must “not lose sight of the hard-won success of AE so that all savers remain protected now and in the future.”
It notes that some sectors are at greater risk of non-compliance than others, including those that employ part-time or seasonal staff with fluctuating earnings and those in the “gig economy”. Referencing the Supreme court hearing in Uber, TPR calls on employers in this sector “to step up and do the right thing for their staff”. It promises to take enforcement action where appropriate to ensure all savers are protected – “no matter what sector they work in”.
In addition, it notes that we are fast approaching the end of September when the Government’s COVID-19 support for businesses comes to an end: “This support has been crucial in keeping thousands of businesses afloat but as it finally winds down, employers must be prepared”.
On 24 August 2021, TPR published an interim response to its consultation on the new single code. In the response, TPR provides some background on the responses received and key issues raised, and outlines the next steps before laying the final code of practice. Key points include:
- TPR does not expect to lay the code in Parliament before spring 2022 and it is therefore “unlikely to become effective before summer 2022”. It is currently “carrying out a full review of the comments received on each of the modules”
- it will not be proceeding with proposals to limit unregulated investments (as currently drafted) to “no more than a fifth of scheme investments”. Its intention “had been, and remains, to protect members of poorly run, and typically small, schemes from investments in poor quality or inappropriate assets”. However, TPR will now consider ways to achieve that “whilst allowing schemes with liquidity risk management plans and prudent investment strategies to maintain exposures to unregulated assets”
- TPR wants the first “own-risk assessment” (“ORA”) to be prepared in a “timely fashion”, and states that the legislative timescale should be seen as a maximum. Following feedback, it will consider how often trustees (“governing bodies”) should review the ORA, and whether any changes or guidance is necessary, particularly for smaller schemes.
On 26 August 2021, the Government launched “a package of measures to help it seize the opportunities of data to boost growth, trade and improve its public services”. This includes announcements relating to the launch of the Government’s new International Data Transfers Expert Council “to support the UK in championing the international flow of data”, and the Government’s preferred candidate for Information Commissioner.
A mission statement on the “UK’s approach to adequacy assessments and international data transfers” and the UK manual for undertaking assessments were also published. The mission statement “sets out the importance of international data transfers and the UK’s “pro-growth” approach to striking new adequacy agreements and implementing more efficient transfer tools”. The UK adequacy manual “provides a framework that informs the technical and systematic assessment of data protection standards in other countries”.