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

• Scotland Bill second reading
• Scottish legal documents can be signed in counterpart and delivered electronically
• EIOPA publishes further stress test documentation
• FCA publishes Quarterly Consultation Paper
• House of Commons Library publishes SPA briefing paper
• NAPF comments on House of Lords pensions drawdown charge debate
• NHS Pension Scheme: Re-tendering guidance and bulk transfer assumptions published
• PASA announces GMP Working Group members and guidance

Scotland Bill second reading

The Scotland Bill received its second reading in the House of Commons on 8 June 2015 – a further step towards the taxation of pensions in Scotland potentially diverging from the rest of the UK.  The Bill is the latest of the steps being taken to give effect to cross-party commitments regarding further devolution of Scotland, made in the run-up to the independence referendum on 18 September 2014.

The Scotland Act 2012 provided for a Scottish rate of income tax (a reduction on the UK rates of income tax by 10% – with the Scottish rate, as set by Scotland, added back) to come into force in the 2016/17 tax year.  However, the Scotland Bill proposes broader measures, giving the Scottish Parliament the right to set income tax rates and thresholds on non-savings and non-dividend income for Scottish taxpayers.  The effect on pension contributions tax relief and the taxation of pension payments is likely to be broadly the same as under the Scotland Act 2012, but as yet the detail is unknown.

Further detail on the Bill can be found in the House of Commons briefing paper.

Scottish legal documents can be signed in counterpart and delivered electronically

The Legal Writings (Counterparts and Delivery) (Scotland) Act 2015 (Commencement) Order 2015 has been laid before the Scottish Parliament.  It brings into force the remaining provisions of the Legal Writings (Counterparts and Delivery) (Scotland) Act 2015 from 1 July 2015, with the result that Scottish legal documents may be signed in counterpart and delivered electronically on and from that date, which was not previously the case.

EIOPA publishes further stress test documentation

Following the launch of its occupational pensions stress test and quantitative assessment on solvency, on 10 June 2015 EIOPA published its first set of questions and answers, as well as an updated DC module reporting template and list of public contacts.

For further detail on the stress test and quantitative assessment, please see our earlier 7 Days dated 18 May 2015.

FCA publishes Quarterly Consultation Paper

Every quarter, the FCA consults on proposed miscellaneous amendments to its Handbook. Its latest consultation includes a proposal to make certain technical changes to the new capital rules for SIPP operators, which are due to come into force on 1 September 2016.

House of Commons Library publishes SPA briefing paper

The House of Commons Library published a briefing paper on 9 June 2015 focusing on the rising SPA, the legislation in relation to it, the approaches taken by different political parties, and the timing of future reviews of SPA.

NAPF comments on House of Lords pensions drawdown charge debate

On 9 June 2015, there was some debate in the House of Lords in response to a question from Lord Bradley on the extent to which the Government has assessed charges on drawdown products, its plans to assess such charges on an ongoing basis, and whether it plans to cap such charges. Commenting on the debate, NAPF Chief Executive Joanne Segars said: “The NAPF shares the Lords’ concerns about savers’ freedom to access their pension savings readily and affordably under the new pension reforms.  We raised these concerns last year when it became clear that the timetable to which the Government wished to implement the reforms was simply unrealistic.  At the heart of this problem lies a tension between providing savers with products quickly and allowing time for a robust market to develop that’s fair to savers.”

NHS Pension Scheme: Re-tendering guidance and bulk transfer assumptions published

On 11 June 2015, the Department of Health published Re-tendering: NHS Pension Scheme and NHSPS and NHSPS 2015 (England and Wales) Actuarial assumptions for bulk transfer calculations from or to funded schemes.

The re-tendering guide sets out the process that should be followed to ensure that appropriate bulk transfer arrangements are in place where an NHS organisation is re-tendering for the provision of services that will involve a transfer of staff back into the NHSPS in accordance with Fair Deal 2013.  Fair Deal 2013 provides that when re-tendering, contracting authorities must require bidders to provide employees with access to a public sector pension scheme in respect of their new employment.

The actuarial assumptions accompany the guidance; these are to be used to calculate transfers to and from funded schemes and involving the NHSPS (including the new scheme which came into effect on 1 April 2015).

PASA announces GMP Working Group members and guidance

On 10 June 2015, PASA announced the members who will make up its GMP Working Group.  The GMP Working Group will identify, agree and implement a set of industry standards and guidance that will allow HMRC and scheme administrators to effectively complete GMP and Scheme Reconciliation Service reconciliations in readiness for the cessation of contracting out in 2016.  In addition on the same date, the Group published its first piece of guidance, a call to action and step-by-step guide to why schemes should reconcile membership and GMP data with HMRC.