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

• Pension schemes warned over climate risk
• New pension scams awareness campaign from the FCA and TPR
• HMRC publishes Countdown Bulletin issue 36
• TPO publishes corporate plan for 2018-21
• TPR uses Proceeds of Crime Act power for first time
• TPR continues to roll out 21st Century Trusteeship campaign

Pension schemes warned over climate risk

On 13 August 2018, ClientEarth announced that it had written to the trustees of 14 pension schemes, after the House of Commons’ Environmental Audit Committee (“EAC”)’s recent Green Finance inquiry highlighted a mixed understanding of climate risk among some of the UK’s largest pension schemes. ClientEarth has targeted those schemes not deemed “more engaged” in identifying and managing climate risk by the EAC, warning that the schemes will be at an increasing risk of litigation if they fail to develop their approach to climate change.

At the same time, ClientEarth published two research reports it had commissioned, on the financial risks posed to pension funds by climate change and how the market is reacting to these risks. The reports suggest that private pension schemes are “lagging behind” public pension schemes and sovereign wealth funds in their approach to climate risk.

For further information on the Government’s proposed trustee duties in relation to climate change, please see our Finance & Investment Briefing – September 2018.

New pension scams awareness campaign from the FCA and TPR

A new pension scams awareness campaign from the FCA and TPR was launched on 14 August 2018, featuring TV, radio, and online adverts. The new ScamSmart campaign targets pension holders aged 45-65, the group identified as most at risk of pension scams.

The campaign materials include a new visual identity for TPR, designed to reflect the changes it is making to the way it works. However, existing ScamSmart and “Scorpion” campaign materials may continue to be used, as the key messages remain the same.

HMRC publishes Countdown Bulletin issue 36

On 14 August 2018, HMRC published issue 36 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 deadlines for the Scheme Reconciliation Service (“SRS”) in relation to GMP reconciliation work:

• the final date to request an SRS re-run of data has been revised, from 30 June 2018 to 30 September 2018. No further requests can be considered after that date. A final scan will be produced and issued to schemes in March 2019, showing scheme membership records held by HMRC at that time
• the deadline for submitting SRS queries which require clerical action is 31 October 2018
• HMRC expects most queries to have been answered by December 2018 but that if necessary, resource will be made available to work through any remaining queries in early 2019.

TPO publishes corporate plan for 2018-21

On 20 August 2018, the Pensions Ombudsman published its corporate plan for 2018-21, setting out its priorities for the next three years.

The plan sets out TPO’s strategic aims, which include providing one centre for the resolution of workplace and personal pension complaints, following the move of TPAS’ dispute resolution function to TPO earlier in 2018.

TPR uses Proceeds of Crime Act power for first time

TPR published its latest quarterly compliance and enforcement bulletin (for April-June 2018) on 17 August 2018.

In the report, TPR records its first use of its “production order” power. The production orders, which require institutions to hand over evidentially admissible financial information on individuals or organisations under the Proceeds of Crime Act 2002, were used as part of an investigation into pension fraud. In this case, TPR required a bank to hand over statements and other details of the accounts linked to the trustees of a pension scheme, which were needed for the ongoing criminal investigation.

The bulletin also confirms that TPR recently carried out a review of the mandatory fines it issues in response to non-compliant DC chair’s statements. As a result of this review, TPR revoked 74 penalties in the quarter. TPR explains that “we did this due to a time delay on our part in explaining to schemes why their statement was not compliant with the regulations”. The recent update to TPR’s guidance on chair’s statements is aimed at ensuring trustees have greater clarity regarding TPR’s expectations.

TPR continues to roll out 21st Century Trusteeship campaign

TPR has released further guidance over the summer, in its 21st Century Trusteeship campaign to protect workplace pension savers by driving up the standards of governance across pension schemes.

The latest instalments look at “managing conflicts of interest” and “meetings and decision making”.