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 publishes further consultation on dashboards
• PASA issues guidance on data accuracy and validation to prepare for dashboards
• HMRC publishes guidance on tax treatment of interest on GMP arrears
• TPR publishes annual survey of DC schemes and issues reminder of VfM requirements
• Regulations made introducing requirement to measure and report on a fourth climate metric

DWP publishes further consultation on dashboards

The DWP published a second consultation on pensions dashboards on 28 June 2022. For details of the first consultation, see our Alert. The consultation seeks views on two specific issues that were not included in the first consultation:

• the point at which dashboards services will be made available to all members of the public, known as the “Dashboards Available Point” (“DAP”), and
• proposals to support the disclosure of information between MaPS and TPR.

The DWP proposes that the Secretary of State for Work and Pensions will specify the DAP, giving the industry at least 90 days’ notice before the DAP occurs. Before issuing its notice, the Secretary of State must be satisfied that the dashboard ecosystem is ready to “support widespread use” by the general public and have consulted with MaPS, TPR and the FCA.

The consultation closes on 19 July 2022.

PASA issues guidance on data accuracy and validation to prepare for dashboards

Following TPR’s “deadline” campaign urging trustees to take action to prepare for pensions dashboards (see our Alert), PASA published guidance on 4 July 2022 to help schemes navigate data accuracy testing and validation. These steps are important to help schemes prepare for “find” and “view” requests, and will require schemes to go further than a typical data review. The guidance provides a list of the various sources available to confirm addresses, dates of birth, names, national insurance numbers, and member existence.

HMRC publishes guidance on tax treatment of interest on GMP arrears

On 30 June 2022, HMRC published its pension schemes newsletter 140. Among other things, the newsletter contains guidance on the tax treatment of interest payments on pension scheme arrears, including when equalising for the effect of GMPs.

The guidance states that where pension arrears are paid in connection with equalising for GMPs, and interest is provided at 1% above base rate (in line with the Lloyd’s judgment), either on a simple or compound basis, or at an interest rate specified in the scheme rules, the interest will be treated as a scheme administration member payment.

Interest payments that are scheme administration member payments are taxable as interest in the tax year in which they are paid (see further guidance from HMRC on this). HMRC outlines that in most cases trustees or scheme administrators will not need to deduct income tax at source unless the payment is made to a person who usually lives outside the UK.

TPR publishes annual survey of DC schemes and issues reminder of VfM requirements

In a press release published on 30 June 2022, TPR reminded DC schemes with less than £100 million of assets under management to ensure they are ready to meet the new requirements to carry out a more detailed VfM assessment, including comparing their scheme’s costs, charges and investment returns against three other larger schemes. Schemes must carry out the new assessment at every scheme year end after 31 December 2021. See our Briefing for more detail.

The press release followed publication of TPR’s annual survey of trust-based occupational DC pension schemes, which included analysis of schemes’ preparedness for new regulatory requirements. The survey found that many DC trustees were at risk of not being sufficiently prepared for the new VfM requirements (where relevant) or pensions dashboards duties.

Regulations made introducing requirement to measure and report on a fourth climate metric

Final regulations introducing the requirement for trustees in scope of the climate-related governance and reporting regulations to measure and report on a fourth climate metric in line with the Paris Agreement were made on 30 June 2022. The regulations will come into force on 1 October 2022. For more information, see our Alert.