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
- DDCMS publishes statement of intent on forthcoming Data Protection Bill
- FCA publishes consultation to help consumers seeking advice
- HM Treasury publishes consultation on financing growth in innovative firms
- OSR confirms CPIH has met National Statistics status
- TPR publishes annual automatic enrolment analysis
- IBM v Dalgleish and others – Court of Appeal decision
- Williams v The Trustees of Swansea University Pension & Assurance Scheme and another
Matt Hancock, the Digital Minister, has today (7 August 2017) announced a number of new measures aimed at giving individuals greater control over their personal data, as well as better protections for the digital age.
The Minister explains that the Bill will bring the GDPR into UK law. In particular, the Bill will be implemented “in a way that as far as possible preserves the concepts of the Data Protection Act to ensure that the transition for all is as smooth as possible, while complying with the GDPR […] in full”.
The DDCMS explains that the Bill will:
- make it simpler to withdraw consent for the use of personal data
- allow people to ask for their personal data held by companies to be erased
- enable parents and guardians to give consent for their child’s data to be used
- require “explicit” consent to be necessary for processing sensitive personal data
- expand the definition of “personal data” to include IP addresses, internet cookies and DNA
- update and strengthen data protection law to reflect the changing nature and scope of the digital economy
- make it easier and free for individuals to require an organisation to disclose the personal data it holds on them
- make it easier for customers to move data between service providers.
In addition, new criminal offences will be created to deter organisations from either intentionally or recklessly creating situations where someone could be identified from anonymised data.
The Bill is due to be published after the Parliamentary summer recess.
Following on from the publication of the final report from the Financial Advice Market Review (“FAMR”), the FCA published a new consultation on 1 August 2017.
The consultation addresses proposed updates to the FCA’s rules and guidance in relation to two of the report’s recommendations, with the aim of helping to deliver affordable and accessible financial advice and guidance. It covers:
- Handbook changes arising from amendments to the definition of advice on retail investments
- the introduction of new guidance to support firms offering services that help consumers making their own investment decisions without a personal recommendation.
It also includes new guidance arising from experiences of the FCA’s Advice Unit, and guidance for firms on the treatment of “insistent clients”.
Comments must be submitted by 2 October 2017.
On 1 August 2017, HMT published a consultation seeking views on how to increase the supply of capital to growing innovative firms, as part of the Treasury’s Patient Capital Review. Patient capital is defined as “long-term investment in innovative firms led by ambitious entrepreneurs who want to build large-scale businesses”.
The consultation identifies DB and DC pension schemes as potential investors, and looks at removing possible barriers to investment, asking how both pension funds and individual savers can be supported to invest in patient capital.
The consultation closes on 22 September 2017.
The Office for Statistics Regulation (“OSR”) issued a letter on 31 July 2017 confirming that the Consumer Prices Index including Owner Occupiers’ Housing Costs (“CPIH”) has met the standards to have its National Statistics status restored.
The statement does not offer an opinion as to whether CPIH should be presented as a headline or preferred measure of inflation (which would affect statutory pension indexation).
On 31 July 2017, TPR issued its fifth annual commentary and analysis in relation to automatic enrolment.
The report contains upper and lower estimates of the numbers of new employers expected to have pension duties until the start of 2020, with TPR predicating that around 73% of all small businesses, and nearly half of “micro businesses”, will have eligible staff.
TPR state that the estimates “demonstrate how automatic enrolment will continue to reverse the decline in workplace saving”. In 2012, 55% of staff were saving into a workplace pension and by 2016 that figure had increased to 78%.
Other key points in the report include:
- the percentage of defined contribution schemes used for AE rose from 93% in 2015-16 to 97% in 2016-17
- TPR used its formal powers to tackle non-compliance with automatic enrolment duties in 50,068 instances in 2016-17, including issuing 33,716 compliance notices, 12,181 fixed penalty notices, and 187 statutory demands for information.
On 3 August 2017, the Court of Appeal published its long-awaited judgment in the IBM case. The key issue to be decided was whether, in implementing its pension proposals, IBM was in breach of the implied duty of good faith.
Overturning the decision of the High Court, the Court of Appeal found that, in implementing its pension proposals, IBM had not breached the duty of good faith. To determine whether the duty of good faith has been breached, it held that a court should apply a “rationality test”, asking whether the employer acted in a manner which was “arbitrary or capricious”.
Further, despite the unappealed breach, by certain of the IBM companies, of the duty to consult, the Court decided it would be wrong to require those companies to undertake a new consultation process before implementing the pension proposals.
For further details, please see our Alert.
In this case concerning an ill-health retirement, the Court of Appeal considered for the first time what it means to be treated “unfavourably” under section 15 of the Equality Act 2010.
The Court of Appeal upheld the view of the EAT that “treatment which is advantageous cannot be said to be “unfavourable” merely because it is thought it could have been more advantageous or, put the other way round, because it is insufficiently advantageous”.
For further details, please see our case report.