Current Issues – April 2024         

TPR General Code:  The Pensions Regulator has released its final version of the General Code of Practice on its website. Departing from a lengthy PDF format, it is now divided into modules for easier navigation. The ten previous Codes have been replaced, and are no longer generally available.  The remaining five Codes, including those on DB funding and notifiable events, are now integrated into the Code of Practice navigation. Access the TPR General Code of Practice here TPR general (single) code of practice

Pensions Dashboards – Staged timetable:  The Government has released long-awaited guidance outlining the phased timetable for occupational pension schemes and personal and stakeholder pension providers to integrate with the pensions dashboards ecosystem. While the legal deadline for connection is set at October 31, 2026, the guidance promotes a staged approach, prioritizing schemes and providers with higher memberships. This revised timetable spans from April 30, 2025, to October 31, 2026, compressing the original 31-month schedule to 18 months. Additionally, The Pensions Regulator has updated its guidance on connection deadlines, offering a convenient tool to verify a scheme’s “connect by” date. Access the TPR Dashboard Guidance Link here.

DWP Committee recommends change to TPR objectives:    The Work and Pensions Committee has proposed a change in the objective of the Pensions Regulator, advocating for the protection of future service benefits in addition to past ones. MPs highlighted the improved financial position of defined benefit pension schemes and the Pension Protection Fund’s substantial reserves of £12 billion, deeming the current objective unnecessary. MPs cautioned against the prevalent low-risk approach to defined benefit funding, which poses a threat to the viability of remaining schemes open to new members. A spokesperson for the Pensions Regulator emphasized their commitment to ensuring pension savers receive promised benefits, despite the favourable funding levels.

Abolition of LTA – Further amending regulations:   HMRC has introduced amending regulations aimed at rectifying issues with the legislation concerning the abolition of the lifetime allowance (LTA), effective from April 6^th. These regulations also feature crucial transitional measures to mitigate immediate risks related to the LTA’s abolition for most schemes. The regulations ensure that scheme rules imposing benefit limits based on LTA references remain effective until the end of the 2028/29 tax year. This alleviates the urgency for trustees to amend scheme rules before April 6, 2024. However, updates will eventually be necessary as the transitional provisions are time-limited, extending the cliff-edge to April 5, 2029.

Reduction in surplus refund tax:   From 6^th April, the authorised surplus repayment charge reduces from 35% to 25% under the Authorised Surplus Payments Charge (Variation of Rate) Order 2024.  This means that where a scheme is wound-up and a surplus is returned to the sponsor, tax of 25% would apply.    

PPF Levy – Certifying deficit reduction contributions:   Trustees are reminded that the deadline for certifying deficit reduction contributions is 5pm on April 30^th.    Certifying DRCs may assist in minimising the 2024/25 PPF Levy.

Mortality assumptions – Update projection models expected:   The Continuous Mortality Investigation (CMI) is expected to issue its 2023 model shortly.  The original proposal was to apply a core weighting of 10% to population date for 2022 and 2023, however, following consultation this has been changed to 15%.    There is still much uncertainty about mortality assumptions following the Covid pandemic.