7 days

In this 7 Days:

• Pension Schemes Bill 2014 to 2015
• DWP publishes findings of research tracking attitudes and behaviours in relation to workplace pensions and automatic enrolment
• GAD: Broad comparability against the Principal Civil Service Pension Scheme in Great Britain
• Policy paper on Scotland in the UK
• FRC proposes amendments to FRS 102 relating to pension obligations
• Pensions Liberation update
  
• Lehman Brothers and TPR reach agreement
• PPF publishes further FAQs on pension protection levy

Pension Schemes Bill 2014 to 2015

The Pensions Scheme Bill 2014 to 2015 introduces provisions to allow for defined ambition pension schemes – in particular, collective defined contribution schemes.  The Bill was introduced to parliament on 26 June 2014

The DWP has today published a new information on the Pension Schemes Bill, including:

• a policy paper on delegated powers and
• the impact assessment.

Please read our earlier Alert to find out more about the Bill.

DWP publishes findings of research tracking attitudes and behaviours in relation to workplace pensions and automatic enrolment

The DWP has published survey findings which show an increase in awareness of the “We’re all in” campaign for automatic enrolment, as well as the strengthening of social norms around workplace pensions.

Overall recognition of the campaign has increased, with television adverts playing a large role.  Awareness of automatic enrolment remained at around three quarters of all working age adults, and correlated with how close people are to their own enrolment date.

GAD: Broad comparability against the Principal Civil Service Pension Scheme in Great Britain

On 24 July 2014, The Public Service (Civil Servants and Others) Pensions Regulations 2014 were laid before parliament.  With effect from that date, existing broad comparability certificates issued by GAD against the PCSPS ceased to be valid for transfers of employment which took place on or after that date.  Certificates for such transfers will need to take account of the new PCSPS regulations.

GAD has now announced it will accept applications for broad comparability assessments against PCSPS which take into account the 2015 reforms.  Requests will be considered for back-dated passport certificates in cases where these replace a passport certificate that has ceased to be valid.

Policy paper on Scotland in the UK

The Scotland Office has published a policy paper setting out the potential issues that may arise if Scotland were to gain independence in the upcoming Referendum.  It highlights the possibility of extra expense to firms selling pensions, as well as insurance and mortgage companies facing costs from operating in both markets.  These costs could ultimately be borne by individuals.

The paper states that independence could lead to reduced choice and higher costs for financial products for people in Scotland and creating a new Scottish currency would mean uncertainty about the value of savings and pensions.

FRC proposes amendments to FRS 102 relating to pension obligations

The Financial Reporting Council has proposed amendments to the FRS 102 accounting standard in response to fears that an overhaul of standards will add millions to corporate liabilities.

The FRC issued an exposure draft in order to clarify issues relating to accounting for defined benefit pensions which state:

• UK and Irish GAAP does not include all the complexities of IFRS; no additional liabilities need be recognised in respect of a ‘schedule of contributions’ that has been agreed in order to address a deficit in the plan
• consistent with current practice, the effect of restricting the recognition of a surplus in a defined benefit plan, where the surplus is not recoverable is recognised in other comprehensive income, rather than profit or loss.

Comments are invited by 21 November 2014 and the FRC expects to issue final amendments in early 2015.

Pensions Liberation update

The PO has announced that the decisions on the pensions liberation cases will be delayed until the Autumn.  The PO has been investigating 84 complaints against personal pension providers, originally indicating that it would publish the determinations before Christmas 2013.

Lehman Brothers and TPR reach agreement

TPR has announced an agreement relating to the Lehman Brothers pension schemes. Action taken by TPR and the scheme trustees relating to the Lehman Brothers collapse has resulted in companies within the Lehman Brothers group agreeing to buy out member benefits in full.

The estimated figure of £184 million will buy out the full defined benefit pension rights of 2,466 members in the scheme.

The agreement comes after nearly six years of investigations and legal proceedings, including the issuing of an FSD, and the settlement payment will be the largest paid to a scheme as a result of the TPRs actions to date.  This is positive news for other pension schemes, as the agreement keeps the scheme out of the PPF, meaning the deficit will not be required to be covered through PPF levies.

Full details can be found in the s89 report issued by TPR.

PPF publishes further FAQs on pension protection levy

The PPF has published answers to further FAQs, including:

• How do we apply for a levy waiver for 2014/15?
• How do the 2014/15 failure scores affect foreign employers?
• How is my investment risk for the 2014/15 levy measured?
• What D&B Failure Scores are used for the 2014/15 levy? When will the Scores be available?

Please see the PPF Website.