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

• DWP launches consultation on protecting DB pension schemes
• FCA Retirement Outcomes Review – final report and package of measures published
• HMRC publishes Countdown Bulletin issue 35
• HMRC Pension Schemes Newsletter 100 published
• HMT: Cold-calling ban delayed
• PPF publishes revised guidance notes and Technical News Issue 10
• TPR releases scheme funding statistics
• TPR updates Chair’s Statement guidance

DWP launches consultation on protecting DB pension schemes

On 26 June 2018, the DWP published the first of the consultations promised by this year’s White Paper (see our Alert), “Protecting [DB] pension schemes – a stronger Pensions Regulator”.

The consultation seeks views on proposals in three key areas:

• increasing TPR’s and trustees’ access to timely information to allow greater corporate oversight
• extending the sanctions regime to deter wrongdoing and to punish it when necessary and
• improving TPR’s existing anti-avoidance powers.

The consultation closes on 21 August 2018.

For further details, please see our Alert.

FCA Retirement Outcomes Review – final report and package of measures published

On 28 June 2018, the FCA published the final report of its Retirement Outcomes Review, an in-depth look at how the pensions and retirement income sector has been working since the pension freedoms were introduced in 2015.

The report found that, whilst many consumers have welcomed the freedoms, consumers generally need more support and protection. The review focused on those consumers who do not take advice, and the evidence shows that some consumers are at risk of harm. Further, weak competitive pressure and low levels of switching between drawdown providers leave consumers open to overcharging.

Alongside the final report therefore, the FCA published a consultation on a proposed package of remedies. These aim to address the harms and emerging issues identified by the FCA, and “to put the market on a good footing for the future”: “It balances the need to protect consumers and improve competition in the market, with allowing the market to further develop and innovate.”

Amongst the proposals are changes to member “wake-up packs”, including recommendations that they:

• should incorporate a one-page ‘headline’ document, in clear and accessible language
• are sent earlier in the process, from age 50, and every five years thereafter until the pot is accessed
• include risk warnings.

The FCA has published Occasional Paper No. 38: ‘Testing retirement communications: Waking up to get wise’, which supports its proposed changes to wake-up packs.

Other proposals include providers offering “ready-made drawdown investment solutions, within a simple choice architecture (‘investment pathways’), which reflect standardised consumer objectives”. The FCA states that “the option of capping charges remains open”. It plans to review the investment pathways, and charges applied to them, one year after implementation.

Comments on the FCA’s proposals should be submitted by 6 September 2018. The FCA’s finalised Handbook text is expected in a Policy Statement, alongside any further consultation required, in January 2019.

HMRC publishes Countdown Bulletin issue 35

On 29 June 2018, HMRC published issue 35 of its “Countdown Bulletin”, which provides information for schemes following the ending of DB contracting-out.

The latest edition of the bulletin includes updates on scheme cessation guidance for Pension Scheme Administrators, and the GMP checker service.

HMRC Pension Schemes Newsletter 100 published

HMRC published Pension Schemes Newsletter 100 on 29 June 2018.

Among other things, it includes information on the new Manage and Register Pension Schemes service, transfers between registered pension schemes, and taxation of flexi-access payments.

HMT: Cold-calling ban delayed

The recent Financial Guidance and Claims Act 2018 provides for, among other things, protection against “unsolicited direct marketing relating to pensions”.

Regulations to make provision for the ban on cold calling were due to have been put in place by the end of June 2018. However, this deadline has not been met, and a formal statement to Parliament explaining the delay is awaited.

PPF publishes revised guidance notes and Technical News Issue 10

The PPF Restructuring and Insolvency Team has published revised versions of guidance notes on pre-packaged administrations, insolvency practitioner remuneration, and potential legal actions contemplated by insolvency practitioners.

The PPF has also published Issue 10 of Technical News, a newsletter on topical issues, including practical guidance for schemes in PPF assessment periods. The latest edition includes a look at the implications of the PPF (Compensation) (Amendment) Regulations 2018 for the PPF’s treatment of step-down pensions.

TPR releases scheme funding statistics

TPR has published the 2018 update to its annual funding statistics for UK DB and hybrid schemes. The update relates to “Tranche 11” schemes (which have effective valuation dates between 22 September 2015 and 21 September 2016 inclusive). These valuations (with due dates for receipt falling within the period December 2016 to December 2017) fall within the fourth triennial cycle of the scheme funding regime.

The report showed an increase in the average funding ratio, and states that just under a fifth of the valuations submitted in the period showed a surplus on a Technical Provisions funding basis

Detailed figures are set out in the Appendix to the update.

TPR updates Chair’s Statement guidance

On 27 June 2018, TPR released an updated version of A Quick Guide to the Chair’s Statement, and a new technical appendix, which form its guidance on the legal requirements in relation to such statements.

TPR’s aim is to provide additional clarity in terms of its expectations of chairs’ statements.