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
- HMRC: Transfers to QROPS 2018
- HMRC Pension Schemes Newsletter 101 published
- TPR publishes latest master trust facts and figures
- WPC pension costs and transparency inquiry launched
- Dr G (Pensions Ombudsman)
On 31 July 2018, HMRC published its yearly release of statistics on the total number and value of transfers made to Qualifying Recognised Overseas Pension Schemes (“QROPS”) each year since 2006-07.
The report states that, in the 2017-18 tax year, 4,700 transfers were made, with a total value of £740m, down from 9,700 transfers with a value of £1,220m during 2016-17. This drop was not unexpected, given that from 9 March 2017, QROPS transfers (with some exemptions, for example, for individuals retiring overseas) are subject to a 25% tax charge (the “Overseas Transfer Charge”).
HMRC published Pension Schemes Newsletter 101 on 31 July 2018.
Among other things, it includes information on registration, authorisation and de-registration of master trusts, time limits for HMRC responses when registering a pension scheme, taxation of flexi-access payments, confirmation that the annual allowance calculator service is now back online, and the application of relief at source based on residency status.
TPR has published statistics on “the current master trust market”.
TPR states that it has now identified 90 master trusts in the market. Of those, three have wound up, 18 have decided not to apply for authorisation, and are exiting the market, and 69 expect to either apply for formal authorisation under the new regime from October 2018 or trigger their exit from the market in the coming months. TPR expects further consolidation before the authorisation window closes in April 2019.
TPR has also announced that it has recruited additional members to its Determination Panel. The appointments mean the panel will increase from nine to 12 members between September 2018 and July 2019, as the panel increases its capacity to consider applications by master trust schemes for authorisation. From October 2018, the Determinations Panel will determine authorisation applications from existing master trusts which want to remain in the market, after considering recommendations put forward by TPR staff.
On 3 August 2018, the Work and Pensions Committee launched a new inquiry seeking views on “whether the pensions industry provides sufficient transparency around charges, investment strategy and performance to consumers.”
This follows on from the FCA’s March 2018 consultation which sought views on potential changes to adviser charging structures, including a possible ban on contingent charging. An FCA policy statement on pension transfers is expected in Autumn 2018.
The Committee invites evidence from all interested parties on questions that include:
- do higher-cost providers deliver higher performance, or simply eat into clients’ savings?
- is the Government doing enough to ensure that workplace pension savers get value for money?
- if customers are unhappy with their providers’ costs and investment performance/strategy, are there barriers to them going elsewhere?
- are IGCs effective in driving value for money?
- do pension customers get value for money from financial advisers?
The deadline for written submissions is 3 September 2018.
TPO recently found a SIPP administrator guilty of maladministration, for failing to provide reasons as to the way in which it had exercised its discretion.
For further information please see our case report.