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:

• BIS responds to Consultation on TUPE Regulations 2006
  
• DWP: Working together to combat pension liberation fraud
  
• DWP provides updated guidance on member tracing service
  
• PPF Confirms Intention to Leave Levy Rules Unchanged
  
• PPF Levy Invoicing Now Underway
  
• TPR statement on completion of Kodak restructuring
  
• TPR Guide for new Trustees
  
• TPR publishes overview of public service pensions governance
  

BIS responds to Consultation on TUPE Regulations 2006

On a transfer of a business, the TUPE Regulations 2006 often apply.  The effect of TUPE is to provide that obligations of the old employer are transferred to the new employer as though the contract of employment (and rights and obligations arising from the employment relationship generally) had been made directly between that new employer and the transferring employees.

The Government sought to simplify TUPE so that business transfers became easier for all concerned and in January 2013 published a consultation on TUPE.

The Government has now responded to the TUPE consultation and set out a reforming package of amendments which aim to improve TUPE without reducing the flexibility, effectiveness or fairness of the labour market.

There are no changes which specifically relate to pensions. But the Government intends to amend TUPE to allow renegotiation of terms derived from collective agreements one year after the transfer, even though the reason for seeking to change them is the transfer, provided that overall the change is no less favourable to the employee.  The new regulations are due to be laid in Parliament in December 2013.

The Department for Business, Innovation & Skills has issued a press release on the TUPE reforms.  BIS states that employers and staff in a business which is changing owner will find the process of the transfer easier, fairer and more effective.

DWP: Working together to combat pension liberation fraud

Ministers, regulators and the pensions industry are meeting on Thursday 12 September for an urgent summit to crack down on pension liberation fraud. In aDWP press release issued ahead of this pensions liberation summit, Steve Webb has warned the public to beware of offers to transfer their pension that are ‘too good to be true’.

Minister for Pensions Steve Webb said

“Pension liberation fraud is a crime. That is why, as part of our plans to build a fairer society, we are working across government and industry to stamp it out and to raise awareness of the dangers of handing over your pension pot. By coming together this week we will look at what else could be done, including whether we may need to change the law.

By signing up to one of these schemes you will destroy your future retirement savings. The promise of easy money when times are tough is all too tempting, and there are far too many unscrupulous people who will prey upon this. These people want your pension pot and if you are offered a deal to unlock your pension, don’t touch it.”

DWP provides updated guidance on member tracing service

The DWP has provided updated guidance on its tracing and letter forwarding service, known as the “Bulk Letter Forwarding Service”.

For a small fee, the DWP will forward “beneficial information” from a pension scheme, insurance company or solicitor to an untraceable customer, provided that every effort has been made to trace the person concerned.

The DWP will not disclose information to the sender about any individual and has the right to refuse applications or stop processing requests at any time.

PPF Confirms Intention to Leave Levy Rules Unchanged

The 2014/15 Pension Protection Levy consultation was launched on 5 September 2013. Responses can be made until 5pm on 24 October 2013.
In the consultation, the PPF confirms its intention to leave the levy parameters unchanged for 2014/15, giving a Levy Estimate of £695 million.  This represents an increase of 10% on the 2013/14 levy year (though individual levy changes will depend on scheme circumstances).

While the PPF has kept changes to a minimum, it proposes procedural improvements for the recertification of contingent assets after a gap in certification and a revised form of wording for the trustee certification of Type A contingent assets.

2014/15 is the final year of the New Levy Framework triennium and the first stage of consultation on the second triennium is expected to be launched early in 2014.

PPF Levy Invoicing Now Underway

The PPF has announced that invoicing of the 2013/14 pension protection levy has started.

Further information can be found on the invoicing pages of the PPF’s website.

TPR statement on completion of Kodak restructuring

On 4 September 2013 TPR responded to the announcement that the Kodak Pension Plan has completed the acquisition from Eastman Kodak Company of the Personalised Imaging and Document Imaging businesses.  TPR provided clearance in April for the acquisition of the two companies and establishment of a new pension plan.

TPR’s interim chief executive Stephen Soper said:

“This solution avoids the Kodak group’s insolvency and pension scheme members will benefit from the cash flows and growth potential of the two businesses.  In our view, this is an important step towards reaching an outcome that best balances the needs of members, the PPF, the company and its employees.

There are still matters to be resolved with the pension trustees and the PPF including monitoring and governance arrangements to provide appropriate safeguards going forwards.  We plan to publish a report outlining how we approached the Kodak case in due course, once the remaining milestones have been completed.”

Mr Soper also commented that, where businesses are in a distressed state, “TPR is prepared to be creative and work collaboratively with pension trustees and employers to explore the options in order to find viable outcomes”.  He encourages trustees to approach TPR at an early stage if they are experiencing financial difficulties that threaten ongoing support to the scheme.

TPR Guide for new Trustees

TPR has published a new introductory guide to help newly appointed trustees, or those who are considering becoming trustees, to understand their trustee obligations and provide an idea of the duties that the trustee role entails.

TPR publishes overview of public service pensions governance

TPR has published information and research on public service pension schemes, ahead of it taking on an expanded role regulating standards of governance and administration for these schemes.

From April 2015, TPR will set standards of governance and administration in the Local Government, NHS, Teachers, Civil Service, Armed Forces, Police, Firefighters and Judicial pension schemes. Between them these schemes represent about 12.6 million members and more than 22,000 employers (2012 figures).

This expanded role was given to TPR in the Public Service Pensions Act 2013, which received Royal Assent in April.

TPR is currently working on a regulatory strategy and codes of practice and plans to consult on these later in the year

Published on 6 September 2013, the first report covers the governance and administration of public service schemes, together with the findings of an accompanying research survey, which provide an overview of the current arrangements.  The findings will help to inform the development of its regulatory approach.