Pensions Weekly Update – 19 May 2021

May 2021
Region: Europe

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 Department for Work and Pensions (DWP) has published for consultation draft regulations amending pensions transfer legislation. The draft regulations implement the powers introduced by the Pension Schemes Act 2021 that are designed to combat pension scams. In order for a statutory transfer to proceed, it will be necessary to meet one of four conditions set out in the draft regulations. The DWP states that its intention is that the regulations will come into force in autumn 2021. The consultation closes at 11:59 p.m. on 9 June 2021.
  • The DWP has also issued for consultation draft regulations introducing new requirements for simpler annual benefit statements for members of defined contribution workplace pension schemes, which are used for automatic enrolment, and where the members are not already in receipt of benefits. The draft regulations are intended to apply from 6 April 2022 and will require trustees/managers to present the annual benefit information in a format that does not exceed one double-sided sheet of A4 paper. The draft regulations are accompanied by draft statutory guidance, which includes an illustrative template to assist trustees and managers. It is unusual to have statutory guidance in the pensions arena, but this is the second item of draft statutory guidance on which the DWP has consulted since the beginning of 2021 (the first being in relation to reporting in line with the recommendations of the Task Force on Climate-related Financial Disclosures). Consultation closes at 11:45 p.m. on 29 June 2021.
  • The government has published its online safety bill. The government had been criticised previously for planning to exclude from the bill online financial harm, such as pension scams advertised on google and social media. The Work and Pension Committee, in its recent report on pension scams, said that it is “immoral that tech firms such as Google are accepting payment to advertise scams, and then further payment from regulators to warn about the scam”. However, the Secretary of State for Digital, Culture, Media and Sport has confirmed in a written statement that the bill will now bring user-generated fraud into the scope of the regulatory framework.
  • The Pensions Dashboards Programme (PDP) has announced further details of its timeline, confirming that it remains on track against the indicative timeline published in October 2020. The PDP says that there will be a staging call for input at the end of this month, detailing proposals for the staged compulsory connection of pension providers to the “dashboard ecosystem”. It notes that the proposals have been developed in conjunction with the DWP, the Financial Conduct Authority and The Pensions Regulator.
  • The Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill has been introduced into Parliament. This includes an amendment to the Pensions Act 2004, which would allow the government to loan money to the Pension Protection Fund (PPF) for the purposes of the Fraud Compensation Fund (FCF). This follows on from a recent announcement by the PPF confirming that it would be raising the maximum levy permitted under legislation in order to assist it to fund the additional claims that it anticipates will be made against the FCF following the court case brought by Dalriada Trustees Limited. In that case, the court confirmed that trustees of occupational pension schemes, which had been used as pension liberation vehicles, would be eligible to apply for compensation from the FCF if the schemes meet certain specified criteria.
  • Signing a buy-in contract is one of the biggest things you will ever do as a trustee, so it is important to understand the key components of the contract and know exactly what you are signing up to. Register to join our webinar on 26 May 2021, in partnership with Hymans Robertson, for a risk transfer and legal perspective on buy-in contracts.
  • Ever wondered if you have remembered to do everything on a change of pension trustees? Our latest #How2DoPensions quick guide, now available for downloading, acts as a helpful aide memoire.
  • Finally, look out for the first of our #PensionsTensions: New Dimensions factsheets, in which we will present some key pension risks and assess how they have evolved in the two years since our #MeetPAUL (Protection Against Unmitigated Liabilities) campaign.

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