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

• State Pension Credit (Amendment) Regulations 2015 laid before Parliament
• New and updated DWP guidance on state pensions
• GAD and DCLG publish documentation in light of Milne PO case
• HMRC Pension Schemes Newsletter 70
• Multi-agency taskforce on pension scams
• OECD consults on Core Principles of Private Pension Regulation
• TPR publishes automatic enrolment review

State Pension Credit (Amendment) Regulations 2015 laid before Parliament

The State Pension Credit (Amendment) Regulations 2015 were laid before Parliament on 20 July 2015, and will come into force on 6 April 2016.

The aim of the regulations is to limit the savings credit element of state pension credit for certain mixed-age couples (where one member reaches SPA before 6 April 2016 and the other on or after that date), and to bring forward the date on which certain assessed income periods end.

Pension credit for mixed-age couples will be restricted from 6 April 2016 so that there will be no new awards of savings credit, but those already receiving it will have some protections. Entitlement will be restricted to where one of the couple was entitled to a savings credit before that date, and has remained entitled to it at all times since that date.

The changes are being made to tie in with the introduction of the new single tier State Pension from 6 April 2016.  The full rate of the new State Pension will be set above the level of the standard minimum guarantee in pension credit, effectively removing the problem that the savings credit was designed to address.

New and updated DWP guidance on state pensions

On 21 July 2015, the DWP published a fact sheet giving information and worked examples on the impact of the new state pension for someone who has been contracted-out of SERPS or S2P.

On 24 July 2015, the DWP revised some of its “State Pension fact sheets” to include up-to-date figures, publishing new versions of the following:

• Introduction to the new State Pension
• How the new State Pension is calculated
• National Insurance and your State Pension
• Self-employment and the State Pension
• The current State Pension scheme

The fact sheets aim to help explain the current and new State Pension schemes.

On the same date, the DWP also published an updated version of its document “Your State Pension explained”. The guide is designed to help people understand the changes to the State Pension scheme from 6 April 2016, and includes sample questions and answers.

GAD and DCLG publish documentation in light of Milne PO case

On 21 July 2015, following the decision of the PO in Milne v the Government Actuary’s Department (see our 7 Days of 18 May 2015), GAD has published a document in relation to the Police Pension Scheme 1987 (England and Wales) on additional payments in respect of past commutations. The pro-forma includes tables of factors to be used in calculating redress and detailed guidance for scheme administrators to aid them in calculating the amounts owed to individuals.

On 23 July 2015, the DCLG published an update on the government’s response to the PO’s decision in the Milne case. In it, the government accepts that other firefighters and police officers are affected by the principles set out in the PO’s Determination, explains who is affected and how they will be contacted to discuss the appropriate payment in their case.

HMRC Pension Schemes Newsletter 70

The latest Pension Schemes Services Newsletter was published on 21 July 2015, and includes information on the Summer Budget 2015 and changes to contracting-out records.

Multi-agency taskforce on pension scams

On 27 July 2015, Project Bloom, the multi-agency task force established to tackle pension liberation (which includes the DWP, TPAS, TPR, the FCA and HMRC) issued a joint press release warning savers to be vigilant of the threat that scammers pose to their pensions. This comes during Citizen’s Advice National Scams Awareness Month, and follows the launch of TPR’s recently updated scam awareness materials. The press release gives real life case studies, and offers “top tips for staying safe”.

OECD consults on Core Principles of Private Pension Regulation

On 22 July 2015, the OECD launched a consultation on an updated version of its 2004 “Recommendation of the Council on Core Principles of Occupational Pension Regulation” with a view to covering different types of private pension, including both personal and DC pensions.

The aim of the proposed draft Recommendation is “to modernise the Core Principles in order to increase their relevance given current practices and developments”. Each “core principle” is followed by guidelines for implementation of effective private pension provision by OECD members.

The consultation runs until 20 October 2015.

TPR publishes automatic enrolment review

On 23 July, TPR published their third annual edition of “Automatic enrolment: Commentary and analysis: April 2014 – March 2015”. The report states that, with more business start-ups and a lower number of closures, around half a million more small and micro employers will have automatic enrolment duties than previously estimated.

Highlights of the report include the following facts and figures:

• By the end of March 2015, a total of 5.2 million eligible job holders were automatically enrolled by around 50,000 employers (74% employed by large organisations, 25% by medium and 1% by small and micro employers).
• Among small and micro employers due to reach their staging dates in 2015 and who were surveyed two months before their staging date, 96% were aware of their automatic enrolment duties, and 89% understood them.
• Around half of all employers completing their declaration of compliance had used postponement.
• In the year to the end of March 2015, TPR used their formal powers on 2,169 occasions, including 1,682 compliance notices, 424 fixed penalty notices and 5 escalating penalty notices.