TPR Single Code of Practice – Interim response to the consultation: We issued a special newsletter earlier in the year on how TPRs proposed new unified Code of Practice would impact small schemes. Atkin Pensions held a meeting with TPR and provided responses to the consultation on behalf of our clients and all small schemes. TPR has now published a short interim response to the consultation and has noted that whilst ‘own risk assessment’ (ORA) was supported in principle “some did raise concerns about the amount of work it would entail, the timeframe, what the finished product would look like and the burden it would place on smaller schemes.” They went on to say “ We continue to work through the responses in this area to identify other possible changes or guidance requirements, particularly for smaller schemes.” TPR received a large number of responses to the consultation and has noted that it will take some time to review them all. As a result they do not expect to put the new code before Parliament until spring 2022.
GMP Equalisation – Supplemental guidance on transfer payments: PASA’s GMP Equalisation Working Group has issued guidance on transfer payments (see: PASA GMP & Transfers). The guidance looks at issues for transferring schemes, receiving schemes, and bulk transfers. The guidance recognises that Trustees are likely to have to discuss practical solutions for many cases where data is sparse or costs of carrying out calculations are likely to outweigh any top-up due to a member.
Guidance for scheme members – DWP consults: A consultation has been launched on how trustees should give a ‘stronger nudge’ to encourage members to take guidance from Pension Wise (now part of the Money Helper service). The government wants trustees to ensure that individuals aged 50 or above have either received or opted-out of receiving appropriate pensions guidance before taking flexible benefits (if offered by the scheme) or transferring to another arrangement to take advantage of flexible benefits. Trustees, or scheme managers, may need to offer to book an appointment, with Pensions Wise for the member. Members who have received regulated financial advice will be exempt from the proposals. As any DB member with a transfer value of £30k or above must get regulated financial advice, Trustees may need to consider the ‘Stronger Nudge’ only for those with smaller transfer values. The new requirements are expected to come into force in April 2022.
New TPR Powers – In force from 1st October 2021: TPR’s extended powers under the Pension Schemes Act 2021 will come into force on 1st October. The powers include two new Contribution Notice triggers, two new criminal offences for debt avoidance, criminal and financial penalties for failure to comply with a Contribution Notice and sanctions where false or misleading information has been provided to TPR or the trustees. Note that the new powers do not apply to acts, or failure to act, before 1st October 2021.
Government challenges Trustees to back ‘long-term’ UK assets: In an open letter to the industry, Boris Johnson and Rishi Sunak have challenged institutional investors to start an ‘Investment Big Bang’. They want pension schemes to drive the UK’s post-covid recovery by investing in illiquid long-term investments, such as infrastructure. The letters notes that ‘Choosing which assets to invest in to secure the best outcomes remains a matter for pension fund trustees…’ Trustees of small DB scheme may find that opportunities to invest in long-term illiquid assets are difficult to find due to the minimum investment sizes that are required. The letter from the PM and Chancellor can be found here: PM & Chancellor Challenge Institutional Investors
HMRC – Help with access to online services: Some pension scheme trustees may not have access to HMRC Online services for their pension schemes. Many older schemes, that were registered before 2006 may note have a Pension Scheme Tax Reference (PSTR), instead holding an older SF (superannuation fund) number. HMRC has asked trustees of such schemes to e-mail them at email@example.com with ‘SF reference pension schemes’ in the subject line. Trustees should include the name of the pension scheme and the SF number in the e-mail.
Forfeiture of benefits – Axminster case: The Trustees of the Axminster Carpets DB scheme asked the Court to provide a decision on the treatment of benefits not claimed six years after they were due. More details of the case can be found in the newsletter, although the case highlighted that, in dealing with arrears due to members, Trustees should consider legal advice on their specific scheme rules.
GMP Equalisation Conversion – PASA publishes guidance: Useful guidance which provides examples of the issues some schemes have faced and how they dealt with them. Schemes should make sure that GMP equalisation is carried out in a proportionate and practical way, ensuring that they understand the reasons and cost/benefit for conversion before starting down this road.
Increase to Minimum Pension Age – Protections: HM Treasury has issued information on the new protections for individuals when the normal minimum pension age (NMPA) increases from 55 to 57 on 6th April 2028. This is likely to interact with a scheme’s rules and may need legal advice following the introduction of the NMPA legislation.
HMRC Online – Log-in to avoid your details being deleted: HMRC has started to delete the online credentials of administrators and practitioners who have not signed in for 3 years, Schemes should check who has access and make sure that they have logged in recently.
TPR Annual Funding Statement – Analysis: TPR believes that many schemes undertaking valuations at 31 March 2021 will have improved funding levels and deficits compared to those reported at 31 March 2018. TPR’s modelling indicates that 1/3rd of schemes will be able to retain their deficit reduction contributions at the same level, however, some will need to increase DRCs to keep the same Recovery Plan end date.