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
- UK’s first DB superfund deal agreed
- TPR publishes speech on accessing DC pensions
- PDP publishes eighth progress update report
- TPO dismisses transfer conditions complaint
- Court of Appeal confirms process for trustees to recoup overpayments
On 6 November 2023, the UK’s first DB superfund transaction was announced, after receiving clearance for the transaction from TPR under its interim regulatory regime. A superfund is an occupational pension scheme set up for the purposes of consolidating DB schemes’ liabilities, where the link to the sponsoring employer is severed or “substantially altered” following the transfer. The formal transfer of members to the superfund is expected to take place at the end of the month. Sackers advised the trustees of the transferring scheme.
On 1 November 2023, TPR published a speech which was given by Nausicaa Delfas, the Chief Executive of TPR, at the launch of a new PPI report on what the UK can learn from other countries’ approaches to DC decumulation. The speech sets out five principles for how TPR would like the DC decumulation market to develop, including that the market must “innovate to provide genuine choice”, and that schemes should provide “wrap around and personalised support” in the lead up to and during decumulation and post-retirement.
TPR is expected to publish interim DC decumulation guidance in 2024, with fuller guidance to follow “over a longer timescale”. The interim guidance will “provide a pathway to decumulation becoming part of the value for money framework”. TPR’s work with other bodies also continues in relation to the advice guidance boundary and decumulation-only CDC schemes.
The PDP published its eighth progress update report on 2 November 2023, setting out details of its “refreshed plan” following the new connection deadline of 31 October 2026 announced earlier this year. The aim is for the guidance setting out the revised staging timetable, to which trustees and scheme managers must have regard, to be published at least 12 months ahead of the first connection date in the guidance. This will follow engagement with the industry during autumn 2023.
TPO has dismissed a complaint from a member that his transfer request had been unnecessarily delayed as a result of the trustee requiring him to seek MoneyHelper guidance. The trustee had decided, based on its due diligence of the receiving scheme, that an “overseas investments” amber flag was present, requiring the member to obtain the guidance. The member’s financial adviser disagreed with the trustee’s interpretation of the transfer conditions regulations.
There have been concerns that the amber flag wording was broader than intended, which has led to schemes taking different approaches where there are overseas investments in a receiving scheme. In this case, TPO decided that the trustee had acted “reasonably”, but did not go so far as suggesting that a MoneyHelper appointment was required in all similar cases.
See our case summary for details.
The Court of Appeal has found that TPO is not a “competent court” for the purposes of recouping overpayments. Where an overpayment is disputed by the member, trustees must apply to the County Court to enforce a TPO determination upholding the overpayment. TPO is reviewing its position and will provide an update shortly.
See our case summary for details.