7 days

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 Transfer requirements

The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 were laid on 8 November 2021, and will come into force on 30 November 2021. These contain substantial amendments compared to the draft version released for consultation in March 2021 (see our Alert and our response to the consultation). The DWP’s response to the consultation was released at the same time.

In brief:

  • the regulations prescribe the conditions for pension transfers, giving trustees the power to refuse transfers where there’s a heightened risk it may be part of a scam. The conditions will only apply to transfers where the transfer process was initiated on or after the date the regulations come into force
  • one of two conditions must be satisfied before a statutory transfer can proceed. Where the trustees or managers of the transferring scheme had decided that neither of the conditions is satisfied, but either they realise a mistake has been made or further evidence or information is provided by the member, they may revisit their decision
  • the trustees or managers of the transferring scheme must ensure that the member is informed, within one month of the transfer process being initiated, of the requirement for one of the two conditions to be satisfied (except where the transfer has already been made)
  • the “First Condition” is that the trustees or managers of the transferring scheme must confirm, beyond reasonable doubt that the receiving scheme is a public service scheme or an authorised master trust or CDC scheme
  • the “Second Condition”, which applies to all transfers to which the First Condition does not is that the trustees or managers of the transferring scheme must decide that no “red flags” are present in respect of the transfer
  • in addition, scams guidance must be taken by the member from MAPS where the trustees or managers decide that any of the “amber flags” are present. If the member fails to do so, this is upgraded to a red flag
  • in the case of an occupational pension scheme or a QROPS, the trustees or managers of the transferring scheme must seek evidence from the member to establish that there is an “employment link” between the member, their employer and the occupational scheme, or that there is a “residency link” between the member and the QROPS. In the case of a QROPS that is an occupational pension scheme, they must seek evidence of either the employment or residency link. The regulations set out the evidence required to demonstrate these “links”.

TPR has also today published guidance to help “trustees understand their new powers to halt suspicious transfers”, which includes information on collecting information, carrying out due diligence, directing members to guidance and refusing a transfer. It also contains a transfer process decision tree.

Nicola Parish, TPR’s Executive Director of Frontline Regulation, said: “these new rules enshrine in legislation two of the key parts of the pledge to combat pension scams – around due diligence measures and issuing members warnings of high-risk transfers. We urge all trustees and pension providers to take note of these new rules and continue to play their part in stopping scams… The pension industry can continue to demonstrate its commitment to stopping the scourge of scammers by joining our pledge campaign.”

Margaret Snowdon, Chair of PSIG, urged the industry “to apply the new conditions for the statutory right to transfer in order to safeguard members’ benefits.” She also commented that schemes “that already carry out due diligence checks and maintain clean lists of transfers destinations should be well prepared for the new rules and the majority of transfers should proceed without delay – the purpose of the changes is to allow trustees to say no when faced with scam signs.”

PSIG is working on a revised version of its Scams Code, which will be published later in the year, with the aim of giving practical help on how to use the new rules.

For further detail, please see our forthcoming Alert.

Commencement order

The Pension Schemes Act 2021 (Commencement No. 4) Regulations 2021, which were also released today, pave the way for the introduction of the new transfer conditions.

Finance Bill 2022

The draft Finance (No.2) Bill and its explanatory notes were published on 4 November. The Bill includes:

  • legislation in respect of the change to NMPA from 55 to 57 (see below)
  • a power to make regulations to address tax impacts that arise from the rectification of age discrimination in public service pension schemes (following the McCloud judgment – see 7 Days)
  • changes to time periods for notice and information requirements in relation to Scheme Pays
  • changes to the calculation of income tax liability under the Income Tax Act 2007 to ensure consistent treatment across pensions tax charges.

The Bill will have its second reading on 16 November 2021.


As originally drafted (see our original Alert), the legislation proposed introducing a “window of opportunity” allowing individuals to join a scheme on or before 5 April 2023 to gain a protected pension age (“PPA”). Following “stakeholder concerns”, the Government is now legislating to close that window as at 23.59 on 3 November 2021 (see our response to consultation). However, individuals who made a “substantive request” to transfer before 4 November 2021 may still receive the protection. Given the current drafting of the legislation, whether a request for a recognised transfer has been made before 4 November may require a judgment call on the part of the trustees, unless HMRC’s forthcoming guidance provides clarity.

According to a statement from John Glen MP, prior notice of the window closing was deliberately not given at the Budget on 27 October 2021 (see 7 Days), as that may have created “unnecessary turbulence in the pensions market and led to some consumer detriment”.

Other clarificatory changes have been made, including to the operation of the block transfer condition, and the interaction of the PPA with the meeting of the block transfer and entitlement conditions. Members of pension schemes with a previously awarded PPA of less than 50 or 55 will see no change in respect of their current PPA.

Guidance is promised from HMRC, including as to transitional provisions, but with no date as yet. In the meantime, HMRC has published a Tax Information and Impact Note on Increasing Normal Minimum Pension Age.

DWP post-Brexit benefits and pensions guidance updated

On 1 November 2021, the DWP updated its guidance explaining the rights of UK nationals in the EU and EEA to benefits and pensions. It has been updated to include guidance for UK nationals living in Switzerland.

FCA publishes ESG strategy and Discussion paper

On 3 November, the FCA released its ESG strategy setting out target outcomes and the actions it expects to take to deliver these. Its “aim is to support the financial sector in driving positive change, including the transition to net zero.”

As part of that strategy, it published a Discussion Paper (to coincide with COP26 Finance Day) on “Sustainability Disclosure Requirements and investment labels”, inviting views on potential criteria to classify and label investment products, with the aim of helping consumers navigate their sustainability characteristics.

The FCA will confirm final rules, which align to TCFD standards, on disclosures for a wider scope of listed issuers, as well as asset managers, life insurers and FCA-regulated pension providers, by the end of 2021.

London Capital & Finance (LCF) Compensation Scheme

On 3 November 2021, HMT announced the launch of the Government’s scheme for compensating London Capital & Finance bondholders (see 7 Days).

The FSCS is administering the Scheme on behalf of the Government and will begin contacting eligible bondholders shortly after the launch of the Scheme with details of their compensation payment. It aims to contact all bondholders by 20 April 2022. The announcement links to the scheme rules and provides a summary of the scheme, together with Q&As.

PMI report on navigating net zero for multi-asset investors

On 1 November 2021, the PMI published a report examining the practical implications for multi-asset investors when moving from climate pledges to practice. Key highlights include:

  • what net zero means for investors
  • approaches to carbon metrics across asset classes
  • monitoring portfolios, and setting interim milestones
  • building an implementation plan
  • upcoming research.

TPO publishes new factsheets

On 2 November 2021, TPO published a factsheet for independent trustees on the Fraud Compensation Fund (“FCF”) and the role of the Ombudsman.

TPO notes that it has been investigating an increasing number of dishonesty cases, with the aim of making scheme recoveries from the wrongdoer wherever possible. It reminds independent trustees of the actions they should take when seeking to recover reduced assets attributable to dishonesty, including consideration of whether the matter should be referred to TPO. A complaint or dispute in this area can be referred to TPO while also making claim under the FCF, although “double recovery” may be prevented.

The factsheet also looks at issues of redress and trustee liability.

On 3 November 2021, TPO published a factsheet on Determinations, including complying with its directions and appealing against a Determination.