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

• Teachers’ pension scheme: independent schools proposal
• New consultation on increased flexibility in the NHS pension scheme
• DWP publishes Shareholder Rights Directive II fact sheet
• PPI report on pension charging structures
• PPF’s role during a restructuring or insolvency

Teachers’ pension scheme: independent schools proposal

On 9 September 2019, the Department for Education launched a consultation to gather views on proposals to change the England and Wales Teachers’ Pension Scheme rules to allow independent schools to opt out more flexibly.

Under current scheme rules, an independent school electing to opt out of the scheme results in all members becoming deferred. The proposal would mean that independent schools electing to opt out of participation for future teaching staff can allow existing staff to remain as active members.

The consultation closes on 3 November 2019.

New consultation on increased flexibility in the NHS pension scheme

On 11 September 2019, a new consultation on proposals to give senior NHS doctors and nurses access to more flexible pensions was launched.

The new proposals include:

• giving clinicians the ability to choose a personalised pension growth level at the start of each tax year and pay correspondingly lower contributions. The level chosen would be a percentage of the normal scheme contribution, in 10% increments, for example opting for 30% or 70% of the full accrual level
• the option to “fine-tune” pension growth towards the end of the tax year when individuals are clearer on total earnings, allowing them to top-up their pension pot to the maximum amount without hitting their tapered annual allowance limit
• where an individual has a large increase in pensionable pay, phasing over a number of years the amount by which the new pay level contributes towards their pension, with the aim of smoothing any spike in growth that can cause sudden tax charges.

This replaces the consultation issued in July, which offered only a “50:50” option. Responses to the withdrawn consultation will be considered alongside those received to this consultation.

Subject to the consultation response, the Department of Health and Social Care intends to work to introduce the new proposals in time for the start of the new tax year.

The consultation closes on 1 November 2019.

DWP publishes Shareholder Rights Directive II fact sheet

On 11 September 2019, the DWP published a factsheet which aims to explain the requirements established by the Shareholder Rights Directive II relating to workplace pension scheme stewardship and governance. It includes information for trustees on how and when they need to make changes to their SIPs (the first set of changes are required by 1 October 2019). Please see our latest Finance and investment briefing for further information.

PPI report on pension charging structures

On 11 September 2019, the PPI published “Pension charging structures and beyond; an outcomes-focused analysis”. The report examines the extent to which charging structures affect savers’ retirement outcomes and what more could be done to assist people to have a retirement outcome that meets their needs.

PPF’s role during a restructuring or insolvency

On 10 September 2019, Malcolm Weir, the PPF’s Director of Restructuring and Insolvency, issued an article which explains how the PPF works with TPR “to negotiate the best outcome” for both it and the relevant pension scheme’s members.