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

• Citizens Advice warns on pension and investment scams
• DWP: further update on Greece
• DWP updates State Pension leaflets
• European Commission adopts delegated Regulation on OTC clearing
• GAD issues update to technical bulletin
• Ombudsman determination in relation to Dr Kenworthy
• PRA issues policy statement on PRA Rulebook
• Principles for Responsible Investment considers potential changes
• TPR issued automatic enrolment call to action

Citizens Advice warns on pension and investment scams

Citizens Advice – who provide face-to-face pensions guidance alongside Pension Wise – have issued a press release warning against ever-increasing pension scams.

They report that two in five Citizens Advice pensions staff have seen people targeted repeatedly with scams, and that pension scams are “evolving into investment scams, targeting the cash lump sums people can release from their pension pots” in the wake of the new benefit freedoms. New scams seen include offering bogus pension reviews, and imitating Pension Wise and TPAS.

Gillian Guy, Chief Executive of Citizens Advice, commented: “Opportunistic fraudsters are finding new ways to go after peoples’ pension pots including offering free pension reviews and promising to invest in funds that don’t necessarily exist”. She notes that Citizens Advice will continue to monitor pension scams closely in order to track how they are evolving, and to warn consumers what to look out for.

DWP: further update on Greece

The DWP issued further advice on 6 August 2015 in relation to UK pension payments into Greek bank accounts. The advice states that if pensioners living in Greece have spoken to the DWP about changing their banking arrangements (to switch payments to non-Greek bank accounts), they have until 28 August 2015 to complete the process.

DWP updates State Pension leaflets

On 6 August 2015, the DWP updated its State Pension leaflets, “Your State Pension statement explained” (DWP040 and DWP040B), “Combined Pension Statement: Your State Pension statement explained” (CPS5) and “Combined Pension Statement: Your State Pension estimate explained” (CPS5T) in light of the introduction of the new single tier State Pension from 6 April 2016.

The leaflets are aimed at helping people understand the information in their State Pension statement.

European Commission adopts delegated Regulation on OTC clearing

On 6 August 2015, the European Commission adopted the delegated Regulation that makes it mandatory for certain over-the-counter (OTC) interest rate derivative contracts to be cleared through central counterparties.

The current exemption for pension schemes is, however, being retained and extended. For further details, see our 7 Days of 8 June 2015.

The Commission’s website states that the final texts of Regulation and its Annex should be available shortly.

GAD issues update to technical bulletin

On 7 August 2015, GAD published their latest update in relation to the PO determination in Milne – a case regarding commutation factors in relation to a lump sum paid to a firefighter.

GAD has issued guidance to relevant Government departments to assist scheme administrators in reviewing the cases of those retired police officers and firefighters to whom the principles of the PO’s determination are relevant. This guidance aims to allow administrators to determine whether redress payments are due and, if they are, to determine the form in which they are to be paid and their amount.

Links to the guidance documents, which contain tables of relevant factors, are contained in the update.

Ombudsman determination in relation to Dr Kenworthy

The PO has issued his decision in relation to Dr Kenworthy, made on 10 July 2015. In the determination, the PO concludes that it is reasonable for trustees to defer taking action to equalise GMPs until the legal position becomes clear.

Click here for a full summary of the case.

PRA issues policy statement on PRA Rulebook

On 3 August 2015, the PRA issued policy statement (PS19/15) publishing final rules, supervisory statements and a statement of policy following on from CP17/15 – The PRA Rulebook: Part 3. It is the third in a series of publications over two years that will redraft the Handbook inherited from the FSA to create the PRA Rulebook, and is relevant to all PRA-regulated firms.

The PRA is planning to launch the new PRA Rulebook online in the course of 2015. The new website aims to reshape the presentation of the PRA’s requirements by improving the online presentation and functionality of the PRA’s rules.

Principles for Responsible Investment considers potential changes

The UN-backed Principles for Responsible Investment initiative (PRI) is considering introducing changes to help “develop a compelling vision for the future, strengthening – and where necessary, redefining – what being a signatory to the Principles means”.

The PRI is a framework for responsible investment, with the aim of creating “a sustainable global financial system”; they currently have more than 1,400 signatories from over 50 countries, representing US$59 trillion of assets.

The PRI’s 2015 Annual Report states that the PRI “must now focus on ensuring that signatories are accountable to the PRI”. There will be consultation on possible mechanisms to achieve this, including differing levels of membership to reflect signatories’ level of commitment to responsible investment and new criteria for delisting signatories.

Martin Skancke, chairman of the PRI, also notes that a review of the underlying ‘six principles’ will be considered.

TPR issued automatic enrolment call to action

On 5 August 2015 TPR issued a press release calling on small and micro employers to check when they must meet new workplace pension duties.

The warning follows TPR’s release of research showing almost two thirds of such employers still do not know the exact date they need to start complying with automatic enrolment laws. TPR notes that it is continuing to develop new tools on its website to simplify the process for employers, and states that it is “using a diverse range of communications to reach out to employers”. However, its message to employers notes the risk of financial penalties if plans are not in place in time.