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 Protection Fund (PPF) has published an update on the progress it has made in increases to PPF compensation as a result of the recent Hughes and Hampshire decisions. In Hughes, the court ruled that the PPF cap is age discriminatory. In Hampshire, the court ruled that EU law requires each individual member of the PPF to receive at least 50% of the value of their accrued old age benefits if their employer becomes insolvent. That decision now forms part of UK law. The PPF has reported that members of the Financial Assistance Scheme are already receiving arrears of pension as a result of the Hampshire decision; the PPF cap on compensation is no longer applied in respect of new retirees; and work has commenced on removing the PPF cap for all other affected members and paying any arrears of pension. The PPF anticipates it will take until the end of 2022 to complete this process.
The Financial Conduct Authority has announced rules, which will come into effect from 1 June 2022, requiring pension providers to give customers a “stronger nudge” to Pension Wise when they wish to access their pension savings. The rules will apply to the providers of personal and stakeholder pension schemes, including those operating self-invested personal pensions. This is similar to the work that is being undertaken by the Department for Work and Pensions (DWP) requiring trustees of occupational pension schemes to provide a stronger nudge towards pensions guidance. The DWP is currently considering feedback on a consultation on its draft regulations in this regard.
The Pensions Regulator (TPR) has published its list of defined benefit superfunds that have been assessed as meeting TPR's key expectations in relation to people, governance, systems and processes, and financial sustainability mechanisms and processes in respect of business plans, costs, assets and liquidity plans, investment governance and risk management. There is currently one superfund on the list. TPR notes that a further assessment will be required prior to a transfer into an assessed superfund and that trustees should still undertake their own due diligence before transferring to any superfunds that are on the assessed list.
In our winter sports-themed Hot Topics in Pensions 2021, we take a look at some of the current developments in the pensions arena that will either help thaw some intractable problems or bring a chill wind over the pensions sector. Also, watch out for our festive quiz 2021, which will have a different feel to it this year.
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.