Legislation: Pension Schemes Bill 2019/2020 second reading. The Bill includes the same measures as those published in October 2019 ahead of the general election. Substantial changes include provisions concerning contribution notices issued under the new employer resources test and more details around "relevant time" for section 75 debt purposes. Other changes include provisions relating to the processing of personal data and data protection legislation. See Bill
Legislation: private member's Bill on PPF compensation and distribution of dividends by scheme employers. The Pensions (Amendment) Bill 2019-2020 had its first reading on 16 January 2020. The Bill removes the cap on compensation payments from the PPF, and also requires approval from the Pensions Regulator and scheme trustees for the distribution of dividends.
HM Treasury: 2020 budget and RPI reform. The 2020 budget (currently being delivered on 11 March) is intended to address the annual allowance taper which has been an issue for the NHS. The Chancellor also announced the launch of a joint consultation between the government and the UK Statistics Authority on the latter's proposed change to the Retail Prices Index (RPI). The consultation will seek views on whether the proposed change in RPI should be made before 2030, and if so when.
Pensions Regulator: DB scheme return from January 2020 checklist. This is unchanged but additional information is now being required in the return or in relation to the next annual return, for example, if there have been transfers out, more information must now be provided. See checklist
Pensions Regulator: Arcadia Group CVA - regulatory intervention report. The purpose of this report is to highlight to the industry what the Regulator expects of employers in company voluntary arrangements with a view to helping other trustees and schemes about the implications of refinancing and the position of other creditors and financial stakeholders. It was noted that the Regulator expects all parties (employers and trustee boards and their advisers) to be fully and willing to work collaboratively with it and the PPF. See report
Pensions Regulator: BHS - £9.5 million contribution notices. The Determinations Panel is to issue two contribution notices to Dominic Chappell in connection with his role in the sale of BHS Ltd to Retail Acquisitions Limited in March 2015 which relate to "extractions" from BHS "without reasonable basis". This case highlights the moral hazard framework in place. See announcement
Pensions Regulator: report highlights further decline in open DB scheme numbers. Active membership in DB schemes has dropped from 1.23 to 1.06 million from 31 March 2018 to 31 March 2019 with the number of schemes closed to future accrual and closed to new members representing 83% of all DB schemes. This report also confirms the majority of active members are in one of the 21 public service pension schemes, with 37% of the total DB membership. See report
Pensions Regulator: former accountant fined for misleading auto-enrolment information. In a third prosecution brought by the Regulator, a former accountant was ordered to pay £4,987 providing false or misleading information to the Regulator about compliance with automatic enrolment duties when staff had not been auto-enrolled. See press release
Pensions Ombudsman: final determinations re Old British Steel Pension Scheme. These confirmed that all complaints (relating to the communications during a de-risking exercise carried out by the trustees during a period of uncertainty as to the Scheme's future and the transfer value calculation basis chosen) against the trustee were unsuccessful. Members had been given the opportunity to individually comment with the Ombudsman looking at each case.
Pensions Ombudsman: member's subsisting rights at time of change to scheme did not include revaluation of deferred pension. The DB scheme had been amended to provide future benefits on a career average revalued earnings basis and an active member had argued that a detrimental modification had been made to it without his consent. His complaint was dismissed as his subsisting rights at the time of the change didn't include revaluation of a deferred pension.
Pensions Ombudsman: trustee permitted to change indexation from RPI to CPI for pension increases. Unlike the BT case, the scheme's rules provided that the "Index" for pension increase purposes was RPI "or any other official cost-of-living selected by the [Trustee] and approved by the Board of Inland Revenue." RPI was defined as including any index accepted by the Commissioners of Inland Revenue for this purpose. In considering the principal employer's request that the trustee use CPI as the reference index for increasing pensions, the trustee had considered the correct rules and had taken professional and expert advice; accordingly it was held that deciding to use CPI was not a perverse decision.
Pensions Ombudsman: member lost right to an unreduced early retirement pension on voluntary redundancy acceptance. The member had applied to be considered for voluntary redundancy and argued that earlier pension scheme changes to redundancy options for voluntary early retirement amounted to a regulated modification under section 67 Pensions Act 1995. The Ombudsman disagreed and held it only applied to subsisting rights which did not include the right to an unreduced pension. However, although the changes did require members' consent (in line with case law on extrinsic contracts), the member had waived his undiscounted pension right as he had been given sufficiently clear information on the voluntary redundancy terms being given up.
Court of Appeal: rejects BT's appeal against dismissal of judicial review application of government direction requiring full GMP indexation in public sector schemes. The case arose as a consequence of the abolition of the additional state pension which had provided top-up guaranteed minimum pensions indexation for members of public sector pension schemes, which impacted BT as a government direction indirectly required the BT Pension Scheme to pay full indexation of GMPs.
High Court: BMA successful in judicial review of forfeiture amendments in NHS Pension Scheme. The Court has allowed the British Medical Association's claim for judicial review of amendments to the NHS Pension Scheme's forfeiture rule which had introduced a suspension power allowing the Secretary of State for Health to suspend payment of benefits under the Scheme both after conviction and before a decision was made on forfeiture.
FCA: 'Assessing Suitability Review 2' to be published in 2020. The FCA's review will focus on ensuring consumers receive sound advice around retirement income and will use a representative sample so it can build a view of the retirement income advice market. Among other things, the FCA also wants to work on defined benefit pension transfer advice, and pension and investment scams. See statement
Upcoming key 2020 dates:
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