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
- CMA publishes summaries of pension roundtables
- Dormant asset scheme appointments
- Chair of the Single Financial Guidance Body appointed
- EAC publishes final Green Finance findings
- FOS annual review reveals increase in pension complaints
- HMRC publishes Countdown Bulletin issue 34
- HMRC Pension Schemes Newsletter 99 published
- Pension companies wound up in the High Court
- TPR releases analysis of Tranche 13 data
- TPR Chief Executive to step down
The inquiry’s provisional decision report is expected in July 2018.
“Industry champions” have now been appointed by the Government, to work to expand the dormant assets scheme across their respective sectors. The industry champions will work with the banking, securities, pensions, insurance, wealth management and investment sectors to increase the amount of dormant funds that can be released for good causes.
Under the current Dormant Accounts scheme, bank or building society accounts that have been left completely untouched for more than 15 years could be used for good causes. Work will now be undertaken to see how this can be expanded to a wider set of financial assets including stocks, shares, pensions and bonds. Customers are able to reclaim any asset that has been classed as dormant at any time.
The Environmental Audit Committee (“EAC”) has today, 4 June 2018, published the final findings of its inquiry into Green Finance.
Greening Finance: embedding sustainability in financial decision making references a “worrying disparity” between the guidance on environmental risks available to trust and contract-based schemes – a result of the different approaches to guidance taken so far by TPR and the FCA (the regulators for trust and contract-based schemes respectively). The report notes that while TPR updated its guidance (for both DB and DC schemes) in light of recommendations by the Law Commission to clarify “that trustees are required to take into account factors that are financially material to investment performance, including environmental, social and governance factors”, but that the FCA has not produced similar guidance.
It also notes that there remains some “confusion about the extent to which pension trustees have a duty to consider environmental risks”, and asks the Government to work to provide clarity in the area.
The Financial Ombudsman Service (“FOS”) released its annual review for the last financial year on 30 May 2018.
The review shows that overall, complaints about pensions had increased again, from 5,160 in 2016/17 to 5,257 in 2017/18. Complaints relating to self-invested personal pensions (“SIPPs”) rose by 37%, and those relating to “occupational pension transfers/opt out” by 11%. 28% of all claims relating to pensions were upheld by FOS.
On 30 May 2018, HMRC published issue 34 of its “Countdown Bulletin”, which provides important information for schemes following the ending of DB contracting-out.
The latest edition of the bulletin includes information on automation of scheme cessation files, and State Scheme Premium payments.
HMRC published Pension Schemes Newsletter 99 on 30 May 2018.
Among other things, it includes information on the new Pension Schemes Online service, available from today, 4 June 2018. HMRC’s “Manage and Register Pension Schemes” service is now available for scheme administrator registrations, and applications to register a pension scheme.
HMRC has updated various guides in light of the change, and also published a bespoke newsletter which contains more information about the launch of the new service.
Newsletter 99 also contains information on:
- relief at source for Scottish Income Tax
- an error in HMRC’s event reports
- clarification from HMRC on the PTM guidance relating to “genuine errors”.
On 30 May 2018, the Insolvency Service reported that six “rogue” pension and finance companies had been wound up in the High Court, following its investigation.
Between 2012 and 2013, 520 people were encouraged to transfer their pension savings from existing providers into one of 15 schemes, with Fast Pensions Ltd acting as the sponsoring employer. FP Scheme Trustees Ltd was the trustee of all 15 pension schemes and funds were invested in four related finance companies.
Investigations found that a total of at least £21 million was invested into the schemes and people were persuaded to transfer their savings through various methods, including cold calls.
The six companies were found to have failed to preserve, maintain or produce adequate accounting records, and failed to cooperate fully with the investigation.
The Official Receiver has made an application to TPR for the appointment of an independent trustee to take over the running of the schemes. Until the application is completed the Official Receiver will continue to act as the trustee to the schemes.
TPR has released an analysis showing the expected positions of DB schemes with valuation dates between September 2017 and September 2018 (known as “Tranche 13” schemes).
TPR’s modelling suggests schemes undertaking valuations at 31 March 2018 will have marginally improved funding levels and deficits compared with those reported three years ago. However, it states that the deficits “have not improved to the extent that would have been expected” over the inter-valuation period, making it likely that schemes’ current recovery plans will not “be on track”, and so that deficit reduction contributions may need to be increased accordingly.
The data provides context to TPR’s annual funding statement, published in April 2018, which sets out TPR’s expectations from trustees and employers, according to the ability of the employer to support the scheme and the scheme’s funding strategy.
TPR confirmed, on 31 May 2018, that its Chief Executive, Lesley Titcomb, has decided to leave TPR at the end of her four year contract in February 2019.
The appointment of a successor will be subject to the approval of the Secretary of State for Work and Pensions.