Pensions Weekly Update – 14 April 2021

April 2021

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes, which you might have missed, with links for further information.

  • The Pension Scams Industry Group has issued a new version of its good practice code to help pensions practitioners to identify and address potential scams. The main content changes are summarised within the document and the restructured layout makes this version much easier to navigate. In particular, the voluntary code states that all transfers of concern should be reported (not just those that are refused) and sets out detailed information on the reporting procedures. Schemes should keep appropriate management information on transfers refused, transfers cancelled by members after concerns have been raised and transfers paid under discharge at member insistence. The guidance also recommends additional telephone engagement with members. Trustees should ensure that their scheme’s transfer processes reflect industry good practice standards.
  • We previously commented on reports that some pension schemes were considering an application for a judicial review of the decision to align RPI with CPIH from 2030. We understand that the schemes have recently decided to proceed with this challenge and we will be keeping a close eye on developments.
  • The Pension Protection Fund (PPF) is raising a fraud compensation levy this year, in anticipation of receiving additional claims following a recent court decision. The court case concerned the operation by the PPF of the Fraud Compensation Fund (FCF) and clarification of certain criteria that must be met before the PPF may pay compensation from the FCF in respect of an occupational pension scheme. The PPF will need to look at the circumstances of each scheme making a claim to see if it meets the relevant criteria for compensation under the FCF. The levy for 2021/22 has been set at 75 pence per member (but 30 pence per member for master trusts), which is the maximum allowed under legislation.
  • The Pensions Ombudsman has published a new factsheet on its Early Resolution Service (ERS), explaining how the ERS operates and the options available to individuals. It has also published an updated version of its “How we investigate complaints” factsheet.
  • The Competition and Markets Authority (CMA) has confirmed that trustees of pension schemes who do not engage fiduciary management consultants are still required to submit a compliance statement and certificate on an annual basis, in order to be compliant with the Investment Consultancy and Fiduciary Management Market Investigation Order 2019. These documents should have been submitted for the first time by 7 January 2021. If you require assistance with this, please get in touch.
  • The Pensions Regulator (TPR) has updated its cross-border guidance to reflect the fact that legislation has been amended so that an overseas scheme, which was being used as an automatic enrolment scheme before 1 January 2021, is not capable of being used as an automatic enrolment scheme following the end of the Brexit transition period. This is a change to TPR’s original post-Brexit guidance. Alternative arrangements should be made and pension provision for members who are already in such a scheme will need to be reviewed in light of the amended legislation.
  • TPR has published its climate change strategy, which sets out its strategic response to climate change and how it thinks TPR can help trustees meet the challenges from climate change. The strategy covers TPR’s six objectives. TPR says that it will publish guidance to assist trustees of larger schemes to comply with the proposed new requirements for reporting in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). It will also review scenario analyses in TCFD reports and publish its findings in order to assist others. Updated climate change content in the Trustee toolkit is something that all trustees should look out for.
  • HMRC has published an internal manual covering the tax treatment of cryptoassets, which confirms that HMRC does not consider cryptoassets to be currency or money, so they cannot be used to pay a tax relievable pension contribution to a registered pension scheme (RPS). The manual also states that if cryptoassets are nevertheless effectively put into an RPS (albeit without tax advantage), the consequence is that they become part of the scheme that is subject to the RPS tax rules.
  • Have you seen our latest blogs? They can be accessed on these links – TPR Tightens the Governance Net in its New Code of Practice and GMP Equalisation Under the Microscope – Proactivity Under the Lens.

If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.

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