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Where a person leaves a final salary pension scheme before normal pension age with a preserved pension, that pension is likely to have lost value due to inflation by the time it is put into payment.  The revaluation provisions, introduced for those who left schemes after 1 January 1986, are designed to provide a measure of protection against inflation where there is at least one full year between the member leaving the scheme and reaching normal pension age.

This Order sets out the revaluation required (for that part of a pension in excess of the guaranteed minimum pension rights) for people who will reach their scheme’s normal pension age in 2014.

The Secretary of State is required to form a judgment of the general increase in prices over the relevant inflation reference periods (ending on the 30 September) in making the Order. Since 2010, the Secretary of State has considered CPI to be the most appropriate measure of inflation.  The CPI figure for the year to September 2013 was 2.7 per cent.

HMRC is writing to customers to give them an opportunity to settle open enquiries into the use of EFRBS arrangements by agreement and without needing to engage in litigation. This offer is intended to minimise costs for customers and HMRC.

Customers have until 31 December 2013 to consider the proposals made in the letter and to indicate whether they wish to take advantage of the optionsoffered.  If they do, any settlement between them and HMRC will be concluded by 30 June 2014.

HMRC has provided a range of FAQs designed to help customers understand how the terms of the opportunities apply in practice to the arrangements customers have entered into.

HMRC has resolved problems with application form APSS228 and provided more advice on applying online for fixed protection 2014.

The NAPF has published a report on Scottish independence: the implications for pensions. The document aims to outline the potential impact of policy intentions set out in the recent Scottish Government publication “Pensions in an independent Scotland” and identifies four key areas where greater clarity is required so that pension funds, and their members, can make informed decisions prior to the Scottish independence referendum will take place on 18 September 2014:

• under EU law, pension schemes with members in Scotland and in the UK could become ‘crossborder’ schemes and would, therefore, need to be fully funded at all times
• there remains a lack of clarity about how the regulatory structure for pension schemes in an independent Scotland would work, and how any transition would be managed
• the Scottish Government’s commitment to the introduction of the single-tier pension provides welcome clarity.  However, there remain unanswered questions about how they will manage the abolition of contracting-out
• while the Pensions Paper sets out no immediate plans to alter pensions tax relief arrangements, a later Scottish Government may wish to make changes to the policy. Such changes would have implications for pension schemes administering pensions for Scottish, as well as English and Welsh, taxpayers.

The PPF has published “Guidance for Trustees on Overpayments and Related Matters” to assist trustees of schemes that are in wind-up and which may be transferring into the FAS.

The guidance aims to:

• assist trustees in minimising the number of overpayments and underpayments that occur
• explaining to members how these payments can arise
• provide information on what the PPF, as FAS scheme manager, can do to help in these circumstances.

TPR has carried out the first in a series of in-depth fact finding visits to business sectors that may face automatic enrolment compliance challenges.

The move marks the launch of a proactive drive towards different sectors and demonstrates how the regulator aims to use direct intervention to ensure employers comply with their statutory duties and help establish a pro compliance culture.

TPR’s automatic enrolment compliance and enforcement team visited a number of recruitment employers and tool an in-depth look at how these employers are implementing automatic enrolment.

The recruitment sector was identified through TPR’s intelligence work in line with the compliance and enforcement proportionality framework which is part of the automatic enrolment compliance and enforcement policy.  The visits were made to prevent and tackle possible breaches, ensure compliance, learn lessons and share good practice among the industry. TPR wants to reduce the likelihood of enforcement action by identifying and, where possible addressing problems early.  As a result of information gathered from the visits, TPR will be issuing compliance guidance tailored for the recruitment sector.

See our Alert on TPR’s DC compliance and enforcement on policy for more information.

On 19 November 2013 TPR published new guidance for trustees considering using asset-backed contribution arrangements to fund pension schemes.

An asset-backed contribution structure (ABC) is a contractual arrangement between a DB pension scheme and the sponsoring employer’s group, under which the employer or another group company agrees to transfer an asset to a ‘special purpose vehicle’.  The pension scheme then receives part of the income generated by the asset for a specified period.

For more information please see TPR’s press release and our Alert on the new guidance.

TPR’s code of practice for trust-based DC pension schemes (the Code) came into force on 21 November 2013.  To coincide with the Code coming into effect, TPR has issued final versions of its compliance and enforcement policy for DC casework and updated its good practice guidance on areas not covered by the Code.

Please see our Alert for more information.