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 publishes further LTA guidance
• International data transfers – upcoming deadline for use of transitional standard clauses
• PLSA issues stewardship and voting guidelines 2024
• PPI reports on effective pensions engagement
• PDP publishes blog on dashboards central digital architecture

HMRC publishes further LTA guidance

On 13 February 2024, HMRC published a new LTA guidance newsletter on the removal of the LTA from 6 April 2024. It contains answers to frequently asked questions on various issues including reporting requirements and transitional arrangements.

The newsletter also confirms that changes are expected to be made to the way the new pension commencement excess lump sum (“PCELS”) authorised payment will operate. The changes will be made through regulations introduced ahead of 6 April 2024. HMRC’s intention is that the PCELS will be payable where a member has exhausted their lump sum allowance, or has exhausted their lump sum and death benefit allowance because they have become entitled to a serious ill-health lump sum, provided certain other conditions are met. The aim is to ensure that individuals who have crystallised benefits above £1,073,100 will be able to continue to commute additional pension as a lump sum when the LTA excess lump sum is no longer available.

International data transfers – upcoming deadline for use of transitional standard clauses

On 21 March 2024, the ability to use transitional standard clauses for international transfers of personal data in relation to contracts concluded on or before 21 September 2022 ends. Trustees who are still relying on the transitional standard clauses should amend relevant contracts to include the new clauses by this date.

PLSA issues stewardship and voting guidelines 2024

The PLSA has published its latest annual Stewardship and Voting Guidelines, intended to provide a framework for trustees, and investors generally, to ensure that companies are “held to account on key issues”. The guidelines take into account recent political and economic events and increased awareness and interest in topics such as cybersecurity, AI and biodiversity. They include new sections on social factors and workforce and developments in ESG, with areas to look out for in 2024.

PPI reports on effective pensions engagement

On 15 February 2024, the PPI published a report on “What could effective pensions engagement look like?”, building on its October 2023 briefing note on engagement in pensions. The report explores:

• the factors that can impact the level of engagement that can “feasibly be achieved”
• the benefits and risks associated with engagement, and
• the ways in which engagement strategies could be strengthened.

It concludes that supporting members to make more informed active choices “will require a substantial amount of work”, but could improve member outcomes.

PDP publishes blog on dashboards central digital architecture

On 13 February 2024, the PDP published a blog on what the central digital architecture is and how it works. It describes the three services which make up the architecture (the identity service, the consent and authorisation service, and the pensions finder service) and explains how these services facilitate the exchange of pensions data.