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:

• Amendments to PPF entry rules
  
• DWP publishes new Pensions Bill and response to consultation on DA
• DWP publishes research and report on the provision of survivors’ benefits in occupational pension schemes
• DWP publishes research on DA pensions
• LGPS: Consultation on draft regulations on scheme governance

Amendments to PPF entry rules

The Pension Protection Fund (Entry Rules) (Amendment) Regulations 2014 will come into force on 21 July 2014. These Regulations widen the scope of the PPF to include certain employers which would otherwise be unable to undergo a qualifying insolvency event for the purposes of PPF entry.

The Regulations came about as a result of the Olympic Airlines case in which the scheme was excluded from the PPF as it had not had a qualifying insolvency event in the UK. The immediate effect of the Regulations will be to provide PPF coverage for the members of the Olympic Airlines scheme.

DWP publishes new Pensions Bill and response to consultation on DA

On 26 June, the DWP published its response to the consultation on “Reshaping workplace pensions for future generations (see our Alert) and a new Pension Schemes Bill.  The main purpose of the Bill is to introduce a legislative framework for DA schemes, in particular CDC.

For details, please see our Alert.

DWP publishes research and report on the provision of survivors’ benefits in occupational pension schemes

On 26 June 2014, the DWP published research which looks at the differences between benefits from DB pension schemes for surviving partners of a scheme member.

The research, which was a requirement of the Marriage (Same Sex Couples Act) 2013, informed a review of survivors’ benefits in occupational pension schemes.

Key findings of the review include:

• The capitalised cost of removing differences in survivor benefits between opposite sex surviving spouses, same sex surviving spouses and surviving civil partners in the public service pension schemes is estimated at around £2.9 billion
• Of this around £1 billion would be payable immediately in respect of benefits due before 1 April 2015.  It is estimated there would then be ongoing costs across public service schemes of around £0.1 billion per annum into the 2020s, reducing thereafter
• The estimated cost to private sector schemes of removing these differences is around £0.4 billion
• If private sector schemes were to provide benefits to same sex couples on the same basis as opposite sex widowers, as most public service schemes do, this is estimated to cost £0.1 billion.

DWP publishes research on DA pensions

On 26 June 2014, the DWP published research which brings together new and existing material about DA pensions, together with research which looks at consumers’ views on DA.

LGPS: Consultation on draft regulations on scheme governance

On 23 June 2014, the Department for Communities and Local Government published a consultation on new governance arrangements for the LGPS which seeks responses from interested parties on draft regulations which are to come into force from October 2014.

The main provisions, include a requirement for the Secretary of State to establish a national scheme advisory board to advise him on the desirability of changes to the scheme.  Provision is also made for administering authorities to establish local pension boards to assist them with the effective and efficient management and administration of the scheme.

The consultation closes on 15 August 2014.