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

• HMT publishes Bank of England and Financial Services Bill
• DWP publishes suite of State Pension documentation
• HMT publishes public financial guidance consultation
• NAPF becomes the PLSA
• NEST gains independent master trust assurance
• Pensions Minister sets out the Government’s “Priorities on pensions”
• PPF publishes closed schemes guidance for trustees

HMT publishes Bank of England and Financial Services Bill

On 14 October 2015, the Bank of England and Financial Services Bill received its first reading in the House of Lords.

The reforms set out in the Bill include measures to increase the scope of Pension Wise, extending the provision of guidance to pensioners considering selling or transferring their annuities when this is eventually introduced (the proposal was delayed in the Summer Budget from 2015 until 2017 – see our Alert). HMT will specify by regulation which annuities come within the scope of the provision, and what interest an individual must have in an annuity to be entitled to receive guidance.

The Bill was published the following day, with the second reading due to take place on 26 October 2015.

DWP publishes suite of State Pension documentation

On 13 October 2015, the DWP updated its factsheet “Topping up your State Pension – The current State Pension”, following the introduction of the new state pension top-up scheme (see 7 Days of 12 October 2015). The revised version reflects the fact that top-up applications can now be made. Similarly revised guidance for advisers was also issued on the same date.

As part of the drive to communicate the new state pension, on 15 October 2015 the DWP published handouts which aim to explain how individuals may be able to increase the amount of the state pension that they will receive, and which National Insurance credits might help them to do so.

HMT publishes public financial guidance consultation

On 12 October 2015, we reported that the FCA and HMT were launching a joint consultation programme exploring what could be done to improve customers’ access to affordable financial advice.

HMT published their own consultation paper on public financial guidance on 12 October 2015 (updated on 15 October 2015). The paper considers the current provision of public financial guidance relating to debt, pensions and “money and financial capability” and looks, amongst other things, at the roles of MAS, Pension Wise and TPAS – including whether there is scope for “a more joined-up relationship” between the latter two.

The deadline, as with the FCA/HMT call for input, is 22 December 2015, with the aim being to report on the outcome of the consultation in tandem with recommendations from the Financial Advice Market Review.

NAPF becomes the PLSA

On 15 October 2015, the NAPF rebranded as the “Pensions and Lifetime Savings Association”, with Chief Executive Joanne Segars announcing the change at the NAPF Annual Conference & Exhibition.

According to the press release, “the purpose of the Pensions and Lifetime Savings Association is to help everyone achieve a better income in retirement. It will speak for all of the workplace pensions community; look beyond pensions and also speak about lifetime savings; and support savers.”

Joanne Segars commented that “Retirement simply doesn’t look like it used to – today people work later in life and they fund their retirement in all sorts of ways. The lines are blurring between work and retirement, between pensions and other forms of saving and between scheme and saver responsibility. But some things remain the same […] for our members, old and new, from the biggest defined benefit schemes to the smallest and newest automatically enrolled employers, and those schemes’ members, young and old, we want to make [the retirement] process as straightforward, efficient and clear as we can. […] We’ll still do what we’ve always done – help schemes help their members save confidently for retirement – but our new identity allows us to share our knowledge and expertise directly and readily with more schemes and more savers.”

NEST gains independent master trust assurance

On 15 October 2015, NEST published its master trust assurance report (following an independent audit by KPMG LLP). The assessment, which forms part of the “master trust assurance framework” developed by the ICAEW and TPR, aims to help master trusts demonstrate that they meet certain standards of administration and governance, to help employers identify good quality schemes when choosing a scheme for auto enrolment and to build confidence in pension saving.

NEST’s chair of trustees, Otto Thoresen, commented that the report “forms part of a suite of governance assurance measures we’ve taken since the scheme was established to demonstrate that NEST is a great quality scheme.” The report outlines the controls NEST has in place as at 31 July 2015, focussing on internal governance and reporting mechanisms, the stability of NEST’s operations, and risk and service level management.

TPR welcomed NEST’s admission to their list of assured master trusts – schemes which are open to employers of all sizes, and which have been independently reviewed to help to demonstrate that they are administered to a high standard. Andrew Warwick-Thompson, executive director at TPR commented that “master trust assurance provides employers with the confidence to choose a master trust that is being operated to a high standard and that can evidence the presence of the quality features we expect to see in a well-run scheme. It also acts as a check against providers operating in this marketplace that do not have the necessary resources or competence. We continue to strongly encourage and support all master trusts to adopt the voluntary assurance framework. As part of our discussions with government, we are looking at how else we can ensure master trusts deliver good member outcomes.”

Pensions Minister sets out the Government’s “Priorities on pensions”

In a Written Ministerial Statement on 15 October 2015, Pensions Minister Baroness Altmann announced that the Government would not yet be looking to implement defined ambition, collective benefits and automatic transfers. Citing in particular the new state pension, ongoing automatic enrolment, and freedom and choice, Baroness Altmann said that “The time is not right to ask the pensions industry to absorb the new swathe of regulation that would be needed to make such further reforms work effectively. The market needs time and space to adjust to the other reforms underway and these areas will be revisited once there has been an opportunity for that to happen.”

She did, however, go on to clarify in a speech to the NAPF Conference on the same day that “collective benefits will have a place”, and that the statement issued did not indicate the “abolition of the idea” of collective DC.

PPF publishes closed schemes guidance for trustees

On 15 October 2015, the PPF published an updated document aimed at providing guidance for trustees where a scheme has been authorised by the PPF to continue as a closed scheme (under section 153 of the Pensions Act 2004).

The guidance covers the winding up requirements, what level of benefits the closed scheme should pay, and continuing responsibilities for the PPF levy and for valuations.