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

• Revaluation of Earnings Factor Order published
• Auto-enrolment Bill will not make it through Parliament
• TPR sets out its expectations for trustees in respect of the conflict in Ukraine
• TPR updates DC guidance for Stronger Nudge requirements
• Government responds to McCloud consultations for the Civil Service and NHS pension schemes
• Dormant Assets Bill receives Royal Assent
• BEIS publishes response to its 2020 consultation on implementing the ban on corporate directors

Revaluation of Earnings Factor Order published

The Social Security Revaluation of Earnings Factors Order 2022 was laid before Parliament on 7 March 2022. The Order aims to ensure that earnings factors relating to national insurance contributions for historic tax years, used in the calculation of additional State Pension and GMPs, maintain their value in line with the increase in average earnings in England, Scotland and Wales. The Order comes into force on 6 April 2022.

Auto-enrolment Bill will not make it through Parliament

Guy Opperman, Pensions Minister, has confirmed that a Private Member’s Bill expanding the auto-enrolment regime to all jobholders aged at least 18 and to remove the lower qualifying earnings threshold (see 7 Days) will not make it through Parliament before the Queen’s Speech, usually delivered in May.  However, he went onto say that the Government will “in the fullness of time, bring forward or support legislation to take the matter forward”.

TPR sets out its expectations for trustees in respect of the conflict in Ukraine

TPR has published a statement on the conflict in Ukraine.  TPR expects trustees to talk to their advisers about any action which they may need to take, depending on their scheme’s investments, risk management or employer covenant exposures.

Given the “potential heightened risk” of cyber-attacks and financial crime in the current environment, TPR also expects trustees to consider whether their cyber safety procedures and other related processes remain adequate or need to be revised.

TPR updates DC guidance for Stronger Nudge requirements

On 2 March 2022, TPR updated its communicating and reporting guidance for DC schemes, to reflect the new stronger nudge requirements that are coming into force on 1 June 2022 (see our Alert).  Key points from the updates include:

• TPR considers it “good practice” to offer to book a Pension Wise appointment as early as possible in the process, as well as providing Pension Wise’s telephone number and website details so the member can contact them directly if preferred. The phone number will differ from that to be given in wake-up packs and will be confirmed soon
•  the separate opt-out communication could consist of a further phone call, an online opt-out form through a member portal, or an email or separate form provided with an application.

Sample declarations for confirming receipt of or opting-out of guidance are set out in Appendix 2 to the guidance.

Government responds to McCloud consultations for the Civil Service and NHS pension schemes

The Government continues its work on public service pension schemes following the judgment in McCloud (see 7 Days):

• on 3 March 2022, the Government responded to its consultation on regulations which aim to amend current legislation to implement the first part of the remedy in the NHS pension schemes
• on 4 March 2022, it responded to the consultation closing the PCSPS to future accrual from 31 March and moving the remaining active members to the “Alpha” scheme on and from 1 April 2022.

The regulations are due to be laid before Parliament this month and should come into force on 1 April 2022.

The responses confirm that work is also underway to assess the changes required to implement the second part of the McCloud remedy.  Draft regulations to implement those changes will be presented in separate public consultations later this year.

Dormant Assets Bill receives Royal Assent

The Dormant Assets Bill, which makes provision to further expand the scope of the dormant asset scheme, received Royal Assent on 24 February 2022.  Under the regime, certain dormant financial products can be transferred to the scheme, which can then distribute those assets to good causes.  The Dormant Assets Act 2022 extends the scheme to cover a wider range of financial products, including benefits under certain personal pension arrangements, where those benefits have become payable and various other conditions are satisfied.

BEIS publishes response to its 2020 consultation on implementing the ban on corporate directors

On 24 February 2022, BEIS published its white paper on corporate transparency and register reform, which includes its response to the consultation on implementing the ban on corporate directors.  Provisions, which are yet to be brought into force, in the Small Business, Enterprise and Employment Act 2015 gave the Government the power to prohibit the appointment of corporate entities to company boards. They also provided scope for the Government to make regulations to set out exceptions to that prohibition.

In the response, specific consideration was given to the pensions sector, given the widespread use of the corporate trustee model.  The Government has now confirmed that it will continue to be permissible for professional trustee companies to be appointed as a director of a trustee board when the provisions come into force, as long as the professional trustee company maintains all natural person directors on its own board.