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

• Employment Tribunals: revised principles for compensating pension loss
• HMRC publishes Countdown Bulletin issue 26
• PASA announces plans to include Master Trusts in accreditation framework
• PLSA announces new Chairs for its DB and DC Councils
• TPR publishes policies on monetary penalties and its description of a “professional trustee”
• TPR agrees proposal for restructuring the British Steel Pension Scheme
• TPR publishes automatic enrolment compliance report

Employment Tribunals: revised principles for compensating pension loss

A working group of employment judges consulted in 2016 on revised guidance for Employment Tribunals on compensation for loss of pension rights. The original guidance was deemed to be no longer reliable following the decision of the Court of Appeal in Griffin v Plymouth Hospital NHS Trust in September 2014 and was withdrawn in 2015.

The working group’s response to the 2016 consultation was published on 10 August 2017, alongside the fourth edition of the Employment Tribunals’ “Principles for compensating pension loss” and related guidance, both of which have effect from that date.

The working group will continue to review and, if necessary, revise the Principles on a regular basis.

The Principles do not have statutory force. This means that Employment Tribunals must have regard to their guidance but are not bound by them.

HMRC publishes Countdown Bulletin issue 26

On 10 August 2017, HMRC published issue 26 of its “Countdown Bulletin”, which provides important information about the ending of contracting-out.

This latest edition of the bulletin includes:

• clarification of the procedure for raising scheme reconciliation queries with HMRC
• an announcement that HMRC will now accept late expressions of interest to register for the scheme reconciliation service (SRS) in exceptional circumstances. HMRC had previously announced in Countdown Bulletin 19 that it would no longer accept requests to register for the SRS.

PASA announces plans to include Master Trusts in accreditation framework

On 8 August 2017, PASA announced plans to extend its existing accreditation framework to Master Trusts and Buyout providers.

Lorraine Harper, Chair of PASA’s Accreditation Committee commented: “With an increasing number of people set to have their pensions delivered by Master Trusts in the future, it is vital that steps have been taken to secure high standards of administration for these members. Whilst there may be assurances in place to assess governance standards for Master Trusts, there is no framework targeted specifically towards administration. Through its new framework, PASA will ensure the ongoing protection of these members, meaning they too can benefit from the good outcomes that come with a high-quality administration service.”

PLSA announces new Chairs for its DB and DC Councils

The PLSA announced on 9 August 2017, the election of new Chairs to head its DB and DC Councils.

Chris Hogg, Chief Executive of Royal Mail Pensions Trustees, will become Chair of the DB Council, replacing Frank Johnson. Carol Young, Head of Pensions, Policy and Products at Royal Bank of Scotland, will replace Richard Butcher as Chair of the DC Council.

The new Chairs will take up office from 20 October 2017 at the PLSA’s Annual Conference and Exhibition.

TPR publishes policies on monetary penalties and its description of a “professional trustee”

Following a consultation earlier in the year, on 10 August 2017 TPR published its:

• monetary penalties policy, which sets out how TPR will generally use its powers to impose penalties under pensions legislation, and

• “professional trustee description policy”, which describes who TPR considers to be a professional trustee.

The new description of a professional trustee focuses on whether a person’s business includes trusteeship. TPR will normally consider a person to be a professional trustee if they have represented themselves to one or more unrelated schemes as having expertise in trustee matters generally.

TPR explains that it would not normally consider a remunerated trustee to be acting as a trustee of a scheme in the course of the business of being a trustee if they are or have been:

• a member of the pension scheme or a related pension scheme (ie a scheme with a sponsoring employer in the same corporate group) or
• employed by, or a director of, a participating employer in the pension scheme (or an employer in the same corporate group) and
• they do not act, or offer to act, as a trustee in relation to any unrelated scheme.

Professional trustees are likely to be given higher penalties under TPR’s monetary penalties policy.

TPR notes that the new description paves the way to build standards and accreditation for professional trustees through the newly formed Professional Trustee Standards Working Group. The group, which was set up by the pension industry’s professional trustee bodies, is developing higher standards for those who are considered to be professional trustees.

TPR agrees proposal for restructuring the British Steel Pension Scheme

TPR announced on 11 August 2017 that it “has given its initial approval to a proposal from Tata Steel UK (TSUK) to restructure the British Steel Pension Scheme (BSPS) and prevent the company becoming insolvent”.

TPR explains that the proposal is designed to bring greater certainty for around 130,000 scheme members, secure a significant a significant cash contribution to the BSPS and minimise the impact on the PPF.

The restructuring is to be done through an RAA, with the BSPS receiving £550 million from the Tata Steel Group and a 33% equity stake in TSUK.

Following completion of the RAA, the scheme will offer members the choice to either transfer to a new scheme (if it meets certain qualifying conditions) which will be sponsored by TSUK, or remain in the existing scheme which will transfer to the PPF.

TSUK and the BSPS trustees have initially agreed the plan, which includes the RAA. Formal approval to the RAA is expected to be granted by TPR, 28 days from the announcement, provided the decision is not referred to the Upper Tribunal by any of the parties who are directly affected by this decision. In addition, TPR has granted clearance that it will not use its anti-avoidance powers.

Commenting on the signing of the RAA, a PPF spokesman said: “Members of the [BSPS] will have seen a lot of speculation about the future of their pensions, so we want to reassure them the PPF is there to protect them throughout this process. The trustees will be providing them with lots of valuable information about their future options. We’d encourage members to consider the details and their position carefully and decide whether the new scheme or the PPF is the better option for them.”

The DWP meanwhile has said that: “The government continues to work closely with interested parties to ensure the best outcome for pension scheme members.” In relation to its 2016 consultation on options for potentially helping the BSPS as part of a wider package of government support, the DWP notes that it wants “to keep all options open while the detail of that is worked through”.

TPR notes that RAAs continue to be rare. If this RAA gains formal approval, it will only be the second that TPR has approved in 2017 and the third in the last two years.

TPR publishes automatic enrolment compliance report

TPR published its latest quarterly auto-enrolment compliance and enforcement report on 10 August 2017.

As well as including data on automatic enrolment compliance, for the first time the bulletin includes a link to the names of pension schemes whose trustees have been fined for failing to complete scheme returns or annual chair’s statements.

TPR notes that the schemes of a number of high profile organisations are represented on the list, including national and multinational businesses.