We wish all of our readers a happy new year. Here is our first weekly summary in 2021 of key legal and regulatory developments relevant to occupational pension schemes, which you might have missed, with links for further information.
The Department for Work and Pensions (DWP) has issued a consultation on options to increase the general levy on occupational and personal pension schemes from April 2021, 2022 and 2023. The consultation closes at noon on 27 January 2021. The government puts forward three options for changing the structure and rate of the levy: two of these options make new distinctions by scheme type.
A cross-sector working group has issued a report providing recommendations for the pensions industry and government to work together to develop and implement solutions for small deferred money purchase pension pots, particularly in master trust schemes. Priorities include forming focus groups to investigate and address administrative challenges, including how to enable low-cost mass transfers, and to undertake proof of concept trials. Pensions Minister Guy Opperman is “determined to address” this problem as a priority.
In advance of publishing its formal levy determination, the Pension Protection Fund (PPF) has confirmed that it will introduce certain of the measures proposed in its September consultation document. These include reducing (by up to 50%) the levy for small schemes with liabilities of up to £50 million and reducing the risk-based levy cap for all schemes from 0.5% of liabilities to 0.25% of liabilities. The PPF has also confirmed the levy estimate of £520 million for the 2021/22 levy year.
The government has announced that it will extend the temporary suspension of statutory demands and winding-up petitions from 31 December 2020 to 31 March 2021, in order to give businesses some more breathing space where a company cannot pay a debt for COVID-19 reasons. For further information, please see a round-up by our restructuring colleagues, which sets out how countries are revamping their insolvency and restructuring laws to combat COVID-19.
The Pensions Regulator (TPR) has said that it will allow longer (until 31 March 2021) for schemes to complete their pension scheme return this year. If TPR updates its systems in time, there will be two additional questions to complete. Trustees will be asked to provide a link to their published statement of investment principles, as well as to provide an assessment of the employer covenant grade and where it would fall in TPR's grading system.
The Pensions Dashboards Programme has published a data standards guide on the key data standards that are intended to provide a “common language” to describe the information to be provided and used by the dashboards. The introduction to the document acknowledges that the standards do not yet provide the technical details. Instead, it is intended to “allow pension providers early sight of the data elements, to enable them to assess the availability and quality of these data items and see how their benefit types may best map to the standard data elements listed”. With pensions dashboards timetabled to launch from 2023, this is a timely reminder to check the availability and quality of pension scheme data.
The Coronavirus Job Retention Scheme has been further extended to the end of April. For more information on the practical implications for employers with furloughed employees, please refer to our publication.
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.