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

• Consultation: Trustee oversight of investment consultants and fiduciary managers
• Consultation on changes to NHS Pension Scheme
• Retail Distribution Review and the Financial Advice Market Review: FCA update
• Retirement Living Standards set for launch at PLSA Annual Conference
• SPP White Paper: How to Unleash the Power of Social Impact Investing
• TPR publishes additional guidance on systems and processes for new master trusts
• TPR latest 2018 public service governance and administration survey

Consultation: Trustee oversight of investment consultants and fiduciary managers

On 29 July 2019, the DWP issued a consultation on draft regulations which are designed to integrate an order produced by the CMA (see 7days) into pensions law.

The regulations will:

• require trustees of occupational pension schemes, subject to certain limited exceptions, to carry out a tender process for fiduciary management services and set objectives for their investment consultants
• allow TPR to oversee the requirements.

The consultation closes on 2 September 2019.

Consultation on changes to NHS Pension Scheme

The Government is aware that some clinicians are considering reducing their workload and turning down additional work to slow the rate at which their NHS pension grows each year, in order to avoid breaching their AA limits.

On 22 July 2019, the Department of Health and Social Care issued a consultation on proposals to change NHS pensions. The consultation focuses on a new “50:50 option” which would let clinicians halve their pension contributions in exchange for halving the rate of pension growth.

The consultation closes on 14 October 2019. The Government intends changes to be made by 6 April 2020.

Retail Distribution Review and the Financial Advice Market Review: FCA update

The Retail Distribution Review (“RDR”) and the Financial Advice Market Review (“FAMR”) were aimed at improving consumer outcomes from financial advice and guidance. The FCA is currently reviewing their impact on the market to date, and assessing how the market may develop to ensure it meets consumer needs now and in the future.

On 26 July 2019, the FCA updated its webpage on the RDR and FAMR with information on its work so far and the next steps it intends to take.

Some of the main themes that have emerged from its May 2019 Call for Input are:

• access to appropriate services: a number of stakeholders feel that not all consumers have appropriate access to a wide range of services to help them in their financial planning, particularly those with smaller amounts of money to invest, and that this problem has worsened in recent years, with regulatory costs contributing to this
• regulatory perimeter: the boundary between providing guidance services and regulated advice is not clear to all stakeholders, resulting in firms feeling unable to provide potentially useful information to consumers if there is a risk that it will be perceived as regulated advice
• consumer engagement: stakeholders said that consumer education in financial planning issues could be improved to encourage engagement with advice and guidance services
• innovation: many stakeholders said that consumers value face-to-face advice and that alternatives (including online services) are less popular. Others believe that, while new forms of advice and guidance are reaching more consumers, work needs to be done to incorporate technology into the market to help consumers.

The FCA also confirmed that it would not include DB pension transfer requirements within the scope of its reviews, as it was not an efficient use of its resources “to focus in this review on areas where there are other FCA projects that are either underway, or have recently been completed in these areas”. Any relevant feedback has been fed into the other projects.

The FCA intends to conduct additional research over the coming months, with a final report due in 2020.

Retirement Living Standards set for launch at PLSA Annual Conference

On 25 July 2019, the PLSA announced that it will launch its new Retirement Living Standards at its Annual Conference & Exhibition in October 2019.

The Retirement Living Standards are the culmination of the recommendation in PLSA’s 2018 Hitting the Target report to develop retirement income targets. This recommendation followed extensive consultation with pensions experts and savers to find ways to help people achieve a better income in retirement.

Pitched at three levels (minimum, moderate and comfortable), the Retirement Living Standards are intended to empower people to better understand the cost of living in retirement and offer an innovative approach to helping savers engage with their pension.

The PLSA will encourage the pensions and guidance sector to adopt the Retirement Living Standards and would like them to be included on the Government-backed dashboard, and Money and Pension Service calculator, to help more people plan effectively for retirement.

SPP White Paper: How to Unleash the Power of Social Impact Investing

On 23 July 2019, the SPP published a White Paper which examines how pension schemes can overcome the obstacles to social impact investing.

TPR publishes additional guidance on systems and processes for new master trusts

TPR has published additional guidance on systems and processes for new master trusts. This guidance is aimed at new master trusts which intend to use an external administration and investment platform and/or investment management providers, or already offer these services in-house.

TPR publishes latest public service governance and administration survey

TPR has published the results of its fourth annual public service governance and administration survey together with a full commentary.