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

• Budget 2018 –publications
• CMA publishes definitions consultation and roundtable summary in investment consultants market investigation
• Government response on climate-related financial disclosures for pension funds
• HMRC publishes Pension schemes newsletter 104
• HMRC publishes Countdown Bulletin issue 38
• PPF publishes paper on post-Hampshire approach
• Perceptions of The Pensions Regulator 2017–18 report published

Budget 2018 –publications

Following the Budget on 29 October 2018, HMT published a policy paper, “Financing growth in innovative firms: one-year on”. This document outlines progress on the “patient capital” action plan and new measures to support DC pension schemes to invest in patient capital. (Patient capital is the provision of long-term finance to high potential firms, typically directed towards start-ups but also towards established businesses looking to achieve next-level growth.)

The Finance Bill 2019 is due to be published on 7 November 2018.

CMA publishes definitions consultation and roundtable summary in investment consultants market investigation

On 2 November 2018 the CMA published a consultation paper on draft definitions of Investment Consultancy services and Fiduciary Management services, for the purposes of potential remedies in connection with its Investment consultants market investigation.

To assist the CMA’s on-going consideration of potential remedies, the CMA asks interested parties to submit comments on the draft definitions by 9 November 2018. The CMA aims to publish its Final Report in December 2018.

The CMA also published a summary of roundtable discussions held by the CMA with groups of pension trustees in October 2018. The discussions covered scheme governance and general competition issues, and the proposed remedies.

Government response on climate-related financial disclosures for pension funds

The Government has published its response to the Environmental Audit Committee’s (“EAC”) June 2018 report Greening Finance: Embedding Sustainability in Financial Decision Making, part of the Green Finance inquiry.

The Government accepts some of the EAC’s recommendations, including that the Government “should clarify that trustees have a fiduciary duty to consider risk and opportunities in the long-term, including environmental risks” (with changes due to be introduced by 1 October 2019).

However, the Government declined to make pension fund climate-related financial disclosures mandatory (as the Task Force on Climate-related Financial Disclosures (“TCFD”) suggested). The Response notes that “the UK’s existing framework of financial law and governance already allows companies to disclose in line with the TCFD recommendations should they wish to do so”.

HMRC publishes Pension schemes newsletter 104

HMRC published Pension schemes newsletter 104 on 31 October 2018. It includes information on:

• reporting of non-taxable death benefits
• reporting overseas transfer charges
• non-statutory clearances
• applications to register a pension scheme
• queries on transfers regarding a scheme’s registration status
• additional features on the Manage and Register Pension Schemes service
• master trust authorisation.

HMRC publishes Countdown Bulletin issue 38

On 2 November 2018, HMRC published issue 38 of its “Countdown Bulletin”, which provides information for schemes following the ending of DB contracting-out.

The latest edition of the bulletin includes information on:

• “stalemate” queries, including examples and the procedure which should be followed for working on these
• financial reconciliation with schemes
• reminders of cut-off dates for submission of queries and data requests.

PPF publishes paper on post-Hampshire approach

On 5 November 2018, the PPF published “Implementing the European Court of Justice ruling”. This follows the September 2018 judgment of the CJEU in Grenville Hampshire v the Board of the Pension Protection Fund, and sets out a high level explanation of the approach the PPF is now taking to ensure that PPF and FAS compensation is paid in line with the judgment. The paper includes worked sample member calculations.

Formal legislation from the DWP to introduce changes to PPF and FAS compensation is awaited.

Perceptions of The Pensions Regulator 2017–18 report published

TPR has published “Perceptions of the Pensions Regulator” – a research report on the 2017-18 “Perceptions Tracker” survey.

The main objective of the survey was to understand how effectively TPR is perceived to be fulfilling its statutory objectives and related functions from the perspective of TPR’s principal audiences. It also gathered findings of pension scam awareness among those surveyed, with a quarter of the survey’s respondents reporting having experienced scam attempts.