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

• Consultation on draft Order to extend bridging pension age discrimination exemption
• HMRC publishes Relief at Source Pension Schemes Newsletter January 2019
• HMRC publishes Countdown Bulletin issue 41
• TPR and Insolvency Service flag cold-calling ban

Consultation on draft Order to extend bridging pension age discrimination exemption

On 16 January 2019, the DWP published a consultation on the draft Equality Act (Age Exception for Pension Schemes) (Amendment) Order 2019.

Some occupational pension schemes currently pay one rate of pension when a member reaches pensionable age under the scheme, and a reduced rate when the member reaches State Pension age, in order to take account of the State Pension the member receives. These are commonly known as “bridging pensions”. Provisions in the Equality Act (Age Exceptions for Pension Schemes) Order 2010 (“the 2010 Order”) permit schemes to do this without breaching age equality requirements. This practice is known as “integration” (or “clawback”). However, the current exemption only permits reductions in pensions between ages 60 and 65, but did not contemplate the gradual rise in SPA to age 68 which has been in progress since 6 December 2018.

The draft Order amends the 2010 Order with the aim of enabling integrated pension schemes to take into account a member’s State Pension when calculating the occupational pension payable, where the member has a State Pension age later than age 65, without breaching their age-related equality obligations. It also makes some further technical changes.

The consultation closes on 30 January 2019. The consultation states that the 2019 Order will come into force at the earliest opportunity, subject to Parliamentary approval.

HMRC publishes Relief at Source Pension Schemes Newsletter January 2019

HMRC published a Relief at Source Pension Schemes Newsletter on 17 January 2019. It contains information on the Scottish Draft Budget and proposed income tax rates; relief at source for Welsh taxpayers; the notification of residency status report for 2019 to 2020; and excess relief.

HMRC publishes Countdown Bulletin issue 41

On 21 January 2019, HMRC published issue 41 of its “Countdown Bulletin”, which provides information for schemes following the ending of DB contracting-out.

The latest edition of the bulletin includes:

• a reminder of the cut-off dates for scheme queries
• notice that the deadline for Contributions Equivalent Premiums notifications has passed.

TPR and Insolvency Service flag cold-calling ban

TPR’s latest blog (published 16 January 2019) issues a reminder about the cold-calling ban, and asks advisers to “help make it as effective as possible”.

Nicola Parish, TPR’s Executive Director of Frontline Regulation, writes that as advisers are often “the first people to learn about a planned transfer… a clear warning from them to their customers about the dangers of suspicious-looking schemes could be enough to prevent a scam.”

TPR asks advisers to direct customers to visit fca.org.uk/scamsmart before they consider transferring their funds, to find information about the warning signs of scams and detail on how they can check on the authenticity of schemes. They also ask customers to report scam attempts to Action Fraud, even if no money is handed over.

On 21 January 2019, the Insolvency Service reiterated the message, noting its recent and ongoing work in the area.