CURRENT ISSUES – JANUARY 2021

DWP General Levy Consultation – Expect increases:  Registered schemes pay a ‘general levy’ to the DWP alongside the, usually, more significant risk based PPF levy.  The DWP is proposing that on increasing the amount of the levy for the years from 2021 to 2023.  Under their preferred option levy rates per member for many DB schemes would double by 2022/23 and then expected to continue to rise year on year. 

Although this amount tends to not to be that significant compared to the scheme overall, Trustees (and employers) should note that this is likely to increase when considering their future cashflows.

New DB Funding Code – Update:  TPR has issued an interim response to their consultation exercise noting that although there appeared to be broad support, a number of concerns had been raised and that they intend to publish a second consultation in the second half of 2021. 

Pension Dashboards – Data standards guide:  The requirements that are likely to fall on schemes in respect of the Pensions Dashboard are beginning to take shape with an initial data standards guide being issued.  Although there is still some way to go before these are rolled out, Schemes need to be aware that, at some point, they will need provide information to these platforms.

Pension Scams – Taking the Pledge:  TPR has launched a campaign calling on trustees and administrators to sign up to a pledge to help to protect pension scheme members from scams.  Trustees, who may wish to consider signing the pledge, should discuss with their advisors and consider whether this may need some updating of their current procedures.

Pension Schemes Bill – TPR powers will not be retrospective:  The Minister responsible for pensions has confirmed that TPRs powers under the Bill to impose huge fines and criminal sanctions will not be retrospective. These powers include strengthening the existing criminal and civil sanctions regime by introducing three new criminal offences and a new power to issue civil penalties of up to £1 million; strengthening the regime for Contribution Notices and enhancing corporate transaction oversight by requiring ‘persons involved in a corporate transaction to make a statement setting out information about the event and how any detriment to a DB pension scheme, as a result of this event, is to be mitigated.’

The new powers have led some in the industry to speculate that there will be an increase in the number of ‘Clearance’ applications made to TPR in advance of corporate activity as Directors and their advisers will wish to avoid the threat of fines and jail.