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
- New legislation published
- FCA launches consultation on disclosure of workplace scheme costs and charges
- FCA response to CMA investigation and proposed remedies
- HMRC publishes Countdown Bulletin issue 43
- HMRC publishes Pension schemes newsletter 107
- PASA launches new data guidance
- PLSA publishes Brexit summaries for trustees
- PTSWG publishes new standards for professional trustees
- SFGB renamed Money and Pensions Service
The following Orders were made on 26 February 2019 and will come into force on 6 April 2019:
- the Guaranteed Minimum Pensions Increase Order 2019 specifies the amount by which the GMP element of an individual’s occupational pension entitlement must be increased – 2.4% for the tax year 2019/20
- the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2019 confirms the upper and lower thresholds of the qualifying earnings band (for calculating contributions for automatic enrolment purposes) for the 2019/20 tax year. These will continue to be aligned with NIC rates – £6,136 for the lower limit of the qualifying earnings band, and £50,000 for the upper limit. The current automatic enrolment and re-enrolment earnings trigger of £10,000 remains unchanged for 2019/20.
On 28 February 2019, the FCA published a consultation setting out proposed rules to require pension scheme governance bodies, such as IGCs, to disclose costs and charges to scheme members. The proposals are designed to improve the quality of information available to workplace pension scheme members and allow such schemes to be better held to account by their members.
The proposed changes mirror those made to occupational schemes in 2018.
The consultation closes on 28 May 2019.
The FCA has written to the CMA, explaining how it will respond to the recommendations contained in the CMA’s report into investment consultancy and fiduciary management services that affect the FCA.
The remedies will come into force through a statutory CMA Order. In addition, the FCA will consult on introducing relevant rules to its Handbook. For example, the FCA plans to:
- prohibit providers of fiduciary management services (where the mandate would cover 20% or more of a scheme’s assets) from accepting a mandate unless they have received confirmation that it has been subject to a competitive tender, as pension scheme trustees will be required to conduct tenders ahead of purchasing, and
- require firms which offer both fiduciary management and investment consultancy services to identify clearly the marketing of these services and include reminders of the obligation on pension scheme trustees to tender for these services.
On 1 March 2019, HMRC published issue 43 of its “Countdown Bulletin”, which provides information for schemes following the ending of DB contracting-out.
Amongst other things, the Bulletin includes a reminder that HMRC will stop sending paper GMP statements from April 2019, as HMRC’s online “GMP Checker” is available at any time for schemes to check their members’ GMP amounts.
HMRC published Pension schemes newsletter 107 on 27 February 2019. It includes, amongst other items, an update on annual returns for relief at source, a reminder of the closing date for applications for master trust authorisation (31 March 2019), advice on reporting non-taxable death benefits and registering as a scheme administrator.
PASA launched the first round of new data guidance at its Annual Administration Conference on 28 February 2019. The guidance covers three key areas: assessment of data quality, managing risk, and meeting compliance and impact assessments, and is designed as “a practical means of helping administrators, trustees and employers assess the quality of their data and, where necessary, take appropriate action to address any issues raised”.
David Fairs, Executive Director of Regulatory Policy at TPR, welcomed the publication of the guidance, saying that it “provides trustees and administrators with the practical support they need to achieve data quality standards, and aligns with our expectations of them. We plan to raise awareness of this guidance to trustees by signposting via our website, and where appropriate, in communications to trustees regarding data quality.”
On 27 February 2019, the PLSA published “The pension trustee’s Brexit to-do list”, which sets out actions trustees should take “to ensure their scheme is well-placed to deal with Brexit”, alongside a “Brexit and Pension Schemes: Getting the right deal for Britain’s savers – Two-page summary brief”.
On 26 February 2019, the Professional Trustee Standards Working Group published new standards for professional trustees of occupational pension schemes (“the Standards”). The Standards will be supported by an accreditation process which will enable professional trustees to demonstrate that they meet the Standards. The publication follows a consultation which began in December 2017.
In brief, the Standards are intended to improve, and provide assurance on, the quality of professional trustees, and to discourage poor practices in the market.
Professional trustees will need to be able to demonstrate that they meet the Standards, which include:
- fitness and propriety
- governance skills
- ongoing professional development
- managing conflicts of interest.
The Standards are set out in three separate schedules, covering:
- general standards for professional trustees
- specific standards for trustee board chairs (and anyone assisting the chair of trustees), and
- additional standards for professional trustees who act as sole trustees.
The Council of the Association of Professional Pension Trustees will be responsible for maintaining the standards, and overseeing the accreditation framework, which will be run by the PMI. The framework is expected to be launched “later this year”.
David Fairs, Executive Director of Regulatory Policy at TPR, said “this robust accreditation framework will help to ensure that professional trustee appointments are high quality and meet the standards that TPR expects.”
It has been announced that the Single Financial Guidance Body, which launched in January 2019 and which consolidates the former services of the Money Advice Service, TPAS and Pension Wise, will be rebranded as the “Money and Pensions Service”.
The Financial Guidance and Claims Act 2018 (Naming and Consequential Amendments) Regulations 2019 making the change was laid before Parliament today (4 March 2019), with the change in name due to come into force on 6 April 2019. The regulations aim to make the necessary consequential changes to legislation which currently references TPAS and MAS, and where those functions of TPAS and MAS now come under the umbrella of the “Money and Pensions Service”. Schemes should update their scheme literature at the next opportunity.