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

• HMRC GMP equalisation guidance on historical transfers and conversion
• HMRC Managing Pension Schemes service newsletter – April 2022
• FCA consultation on regulated fees and levies for 2022/23
• TPR webinar on preventing pension scams
• FCA strategy for 2022 to 2025
• PLSA and ABI industry campaign to boost members’ understanding and engagement with pensions
• New Pensions Ombudsman factsheet for members – Early Resolution Service

HMRC GMP equalisation guidance on historical transfers and conversion

On 6 April 2022, HMRC released further guidance on some of the pensions tax issues associated with equalising benefits for the effect of GMPs. The guidance focuses specifically on tax issues arising in respect of correcting past transfers out and some of the tax issues arising on GMP conversion. It confirms HMRC’s views that:

• where trustees need to take corrective action in respect of a historical transfer out, this could potentially be addressed either by way of a transfer payment to another scheme or a lump sum paid directly to the member
• a top-up transfer to another pension scheme will generally be an authorised payment, as long as the conditions for a “recognised transfer” are satisfied
• the authorised lump sum options are a “relevant accretion”, a small lump sum payment, or a winding-up lump sum provided, in each case, that the relevant conditions are met.

HMRC also provides views on the pensions tax implications of GMP conversion, but only for existing pensioners as it needs to “undertake further work” in respect of deferred members.

See our Alert for further information.

HMRC Managing Pension Schemes service newsletter – April 2022

On 11 April 2022, HMRC published its Managing Pension Schemes service newsletter. The newsletter contains guidance for administrators on migrating pension schemes registered on the “Pension Schemes Online service” to the “Managing Pension Schemes service”, including guidance on pension scheme reporting using the new Managing Pension Schemes service.

FCA consultation on regulated fees and levies for 2022/23

On 7 April 2022, the FCA published its annual fees consultation paper which sets out what fees the FCA will charge for the financial year 2022/23 to fund organisations including the FCA itself, the FOS, and MaPS. The consultation closes on 12 May 2022.

TPR webinar on preventing pension scams

On 6 April 2022, TPR published a webinar discussing the increasing prevalence of pension scams. It provides updates to TPR’s pledge to combat pension scams launched in November 2020 (see 7 Days), and also covers the restrictions on statutory transfers which came into force on 30 November 2021 (see Hot Topic). The updates to the pledge to combat pension scams include removing two of the original principles of the pledge (taking appropriate due diligence measures by carrying out checks on pension transfers, and warning members about high-risk transfers) since TPR considers these principles are now addressed by the new restrictions on statutory transfers.

FCA strategy for 2022 to 2025

On 7 April 2022, the FCA published its three-year strategy for 2022 to 2025, and its business plan for the financial year 2022/23. Its priorities and objectives include, among other matters, improving capacity to take action against “problem firms” who do not meet required standards, and continuing to tackle pension scams by taking down illegal advertising quickly and warning consumers through the ScamSmart campaign.

PLSA and ABI industry campaign to boost members’ understanding and engagement with pensions

On 5 April 2022, the PLSA and ABI announced a joint industry campaign to boost members’ understanding and engagement with their pensions. The campaign will run in autumn/winter 2022 and aims to help people understand the basics of pensions, encouraging members to engage with existing pensions communications and retirement and investment options. The campaign will include provision of freely available resources for use by the pensions industry.

New Pensions Ombudsman factsheet for members – Early Resolution Service

On 30 March 2022, TPO published a factsheet for members on using the Early Resolution Service (ERS). The factsheet gives guidance for members on when members can use the ERS, what happens as part of the ERS process, and moving to a formal investigation if the ERS does not resolve a complaint.