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 newsletter 131
• ICO updates guidance on its regulatory approach
• Consultation on draft scheme regulations for Judicial Pension Scheme
• Pensions Dashboards update
• TPR clarifies pension scheme eligibility for FCF compensation
• TPR Scheme funding analysis 2021

HMRC publishes newsletter 131

On 30 July 2021, HMRC published its pension schemes newsletter 131 which covers:

• relief at source (annual returns of information, and NI applications)
• managing pension schemes service (including service updates, and user research)
• AA (pension savings statements, and declaring the AA charge on the Self-Assessment tax return)
• non-taxable payments following a member’s death and Real Time Information (“RTI”) reporting
• pension flexibility and QROPS transfer statistics

ICO updates guidance on its regulatory approach

On 27 July 2021, the ICO published refreshed guidance on its regulatory approach during the COVID-19 pandemic, confirming its continued commitment to being a “pragmatic and proportionate regulator”. The updated document includes minor amendments to the previous September 2020 version, and highlights the ICO’s expectation for organisations to have “robust recovery plans in place to ensure they reduce [any backlogs of complaints] within a reasonable timeframe.”

In an accompanying blog, the ICO confirmed it will continue to update on its regulatory approach “to provide clarity to organisations both during the pandemic and beyond”, including updating its Regulatory Action Policy which it will consult on later this year.

Consultation on draft scheme regulations for Judicial Pension Scheme

On 23 July 2021, the MOJ published a consultation seeking views on draft scheme regulations for the Judicial Pension Scheme 2022 which will reform the current judicial pension arrangements. The aim is to rectify a lack of pension provision for a significant proportion of judges who work on a fee-paid basis and to simplify the current mixture of judicial pension schemes. The draft regulations contain the detailed rules and features of the scheme.

The consultation closes on 8 October 2021.

Pensions Dashboards update

On 28 July 2021, the PDP published a blog entitled “Early connection to dashboards reaps rewards”, which accompanies the PDP’s announcement that “seven major pension organisations” have been recruited to the PDP’s initial “alpha” test phase of pensions dashboards. In the blog, Paul Noone, PDP Head of Onboarding, confirmed that more pension providers “are lining up to take part in the subsequent testing phases, where we’ll scale up the numbers of participating data providers, prior to compulsory staging”.

On 29 July 2021, the PDP also published a blog entitled “Pensions dashboards are the start of a journey”, which discusses how the pensions dashboard ties into the wider MaPS vision. In the blog, Carolyn Jones, MaPS Head of Pensions Policy and Strategy, states that the “dashboard is just the start of the conversation we should have with our customers” and that dashboards will lead individuals “towards taking control of their savings and preparing effectively for their retirement”.

PDP has also published a summary report which presents the findings of its initial phase of research, based on interviews conducted in early 2021, to gain a greater understanding of dashboard users, their circumstances, behaviours and attitudes, and their views of the pensions dashboards concept. PDP intend to use the findings to inform its development of the supporting infrastructure and data ecosystem.

In addition, PASA has announced that it will lead the development of conventions for matching pensions dashboards users with their pensions, working alongside the PLSA and the ABI. These organisations will engage with TPR and the FCA to ensure that the data matching conventions align with their expected regimes for dashboards regulation.

TPR clarifies pension scheme eligibility for FCF compensation

On 16 July 2021, Charles Counsell, Chief Executive of TPR, and Oliver Morley, Chief Executive of the PPF, responded to the WPC’s queries regarding the circumstances in which pension scheme members may be entitled to compensation from the Fraud Compensation Fund (“FCF”) (see 7 Days). TPR confirmed that:

• “it is possible for trust-based occupational pension schemes without assets and without trustees to, in principle, make a claim on the FCF. However, the way the FCF legislation is framed means a trustee needs to be in place in practice in order to progress applications and process compensation”
• there are a small number of cases which could potentially be eligible for FCF compensation where no trustee has been appointed; these cases are now being reviewed by TPR. TPR acknowledges that, “for both legal and practical reasons”, it is difficult for cases to be effectively progressed and ultimately for FCF compensation (where applicable) to be paid where there is no active trustee in place
• the FCF’s engagement is principally with TPR (rather than the PPF) in relation to schemes which may be eligible for compensation from the FCF but have no trustees
• all schemes where FCF claims are expected, including schemes without trustees, are included in the PPF’s estimate of £350 million in compensation payments claimed as a result of the High Court ruling in PPF v Dalriada Trustees (see 7 Days).

TPR Scheme funding analysis 2021

On 27 July 2021, TPR published its annual analysis of DB valuations, and recovery plans of DB and hybrid pension schemes. The report is based on “tranche 14” schemes (those with effective valuation dates falling from 22 September 2018 to 21 September 2019 inclusive).

Among other findings, 31% of schemes reported a surplus on the technical provisions funding basis, and the average funding level was 91.4% on that basis, a 4.4% improvement from the same valuations submitted three years prior.