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

• European Union (Withdrawal Agreement) Act 2020 passed
• New Government briefing papers
• Consultation response on MLD5 and new consultation on Trust Registration Service
• FCA focus on pensions and investment advice
• Technical bulletin on proposed changes to RPI
• HMRC consultation on legislation for off-payroll working rules
• ICO guidance on timelines when clarifying DSARs
• 2020 scheme return checklist
• PHSO investigation of changes to women’s state pension ages

European Union (Withdrawal Agreement) Act 2020 passed

On 23 January 2020, the European Union (Withdrawal Agreement) Act 2020 (the “Act”) received royal assent.  The Act implements the Withdrawal Agreement in relation to the withdrawal of the UK from the EU.  The UK will exit the EU on 31 January 2020 but there will be a transitional period until 11.00pm on 31 December 2020.  During that period, the UK will negotiate the detail of its future relationship with the EU, whilst common rules remain in place and EU law continues to apply to the UK under the terms set out in the Withdrawal Agreement.

On 24 January 2020, the Government released updated guidance explaining the rights of UK nationals in the European Economic Area (EEA) or Switzerland and EEA and Swiss citizens in the UK to benefits and pensions after the UK has left the EU.

New Government briefing papers

The House of Commons Library has published two new briefing papers:

• “Pension tax rules – impact on NHS consultants and GPs”, which “focuses on the current debate about the impact of pension tax rules on some senior NHS staff” and
• “Pensions dashboards”, which “looks at the debate on the pensions dashboard, which is being developed to enable people to view all their lifetime pension savings (including their state pension) in one place”.

The House of Lords Library has also issued a new briefing paper on the Pension Schemes Bill, which looks at the three principal areas the bill addresses: collective defined contribution pensions, the Pensions Regulator and pensions dashboards (see our Alert).

Consultation response on MLD5 and new consultation on Trust Registration Service

HMT published its response to consultation on transposition of the Fifth Money Laundering Directive (“MLD5”) on 23 January 2020. The response explains that the final policy decisions outlined in it have been transposed into domestic law through secondary legislation which came into force on 10 January 2020 (see 7 days).  The response discussed feedback on changes to the Trust Registration Service (“TRS”) following MLD5, which could affect pension schemes, noting that detailed consultation on this would follow.

HMT and HMRC published the promised technical consultation on potential amendments to the TRS on 24 January 2020.  The consultation suggests that the current policy that pension schemes registered with HMRC on its pension scheme online service do not have to register with the TRS, will continue.  The consultation closes on 21 February 2020.

FCA focus on pensions and investment advice

On 21 January 2020, the FCA released a statement on its intention to review the market for pensions and investment advice for a second time – the “Assessing Suitability Review 2”.  The statement explains that “the review will focus on the advice that consumers receive around retirement income”, and notes “with a greater number of options now available in retirement planning, it is vital that consumers get good advice at the point they access their pension savings and, if necessary, going forward”.  The FCA is aiming to publish a report setting out the results of the review “in 2020”.

The FCA has also issued a letter to CEOs and directors of financial advice firms setting out its approach to tackling key areas of concern and summarising the action it expects those firms to undertake.  It highlights DB transfer advice as a continuing area of concern. The FCA “will continue to focus on this area until the quality of pension transfer advice reaches the same standard as the wider advice market”. It plans to publish finalised Handbook rules and guidance in “Q1 2020”.

The letter also draws out pension scams as a risk area, and says that the FCA “will continue to focus [its] intelligence and supervisory activities on taking prompt and assertive action on the firms and individuals who facilitate or participate in scams”.

Technical bulletin on proposed changes to RPI

GAD has released a technical bulletin following the Chancellor’s announcement that the Government will launch a consultation at Budget 2020 regarding the future of RPI (see 7 days).  The bulletin outlines the proposed changes to the inflationary measure and their potential impact.

HMRC consultation on legislation for off-payroll working rules

On 22 January 2020, HMRC issued a consultation on draft secondary legislation relating to the reform of the off-payroll working rules, due to come into effect from 6 April 2020.

Off-payroll working rules, known as IR35, were introduced in 2000 with the aim of ensuring that someone working like an employee, but through a company, pays similar taxes to other employees. Reforms were announced in the 2018 Budget, designed to tackle non-compliance with off-payroll working rules by making medium and large organisations in the private and third sectors responsible for determining the tax status of contractors.

Earlier this month the Government announced the launch of a review into the changes to the off-payroll working rules, to determine if “any further steps can be taken to ensure the smooth and successful implementation of the reforms”.

ICO guidance on timelines when clarifying DSARs

The ICO has made changes to its right of access guidance on timelines where clarification is sought in relation to a data subject access request (or “DSAR”).  The guidance now states “if you process a large amount of information about an individual, you may ask them to specify the information or processing activities their request relates to before responding to the request. However, this does not affect the timescale for responding – you must still respond to their request within one month. You may be able to extend the time limit by two months if the request is complex or the individual has made a number of requests”.  This means that the timelines for compliance are not paused to allow for any clarification.

This reflects the language included in the more detailed draft guidance on right of access, on which the ICO is currently consulting (see 7 days).  That consultation closes on 12 February 2020.

2020 scheme return checklist

TPR has published a checklist to help with completing returns for DB and hybrid schemes from January 2020.  TPR notes that there are no changes to the scheme return this year, but that the checklist can be used as a reminder of what schemes need to do.  The checklist highlights two issues with the Exchange system, relevant for schemes that need to complete the contingent asset and deficit reduction contribution certificate sections of the scheme return.

PHSO investigation of changes to women’s state pension ages

The Parliamentary and Health Service Ombudsman (“PHSO”) has announced that it will resume considering a sample of complaints relating to the communication of changes to women’s State Pension ages.  This investigation had been paused while a related judicial review (see 7 days) had been taking place.

The statement makes it clear that, following the High Court judicial review ruling, the PHSO cannot recommend that “DWP reimburse ‘lost’ pensions. Moreover, [it] cannot recommend that anyone receive their State Pension any earlier than the law allows”.  However, it is proposing to investigate issues not covered by the judicial review, and whether there was any maladministration in communicating the changes, which led to injustice.  If the PHSO finds that injustice was suffered as a result of maladministration, it has the power to make recommendations which might include compensation.