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 Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2022 have now been laid before Parliament, with an effective date of 6 April 2022. The regulations apply in respect of schemes providing defined contribution benefits that are used for automatic enrolment. The regulations prohibit a flat fee charge from being made where it would reduce the value of a member's rights in a default arrangement to less than £100. The Department for Work and Pensions (DWP) has also updated its guidance on the charge cap. The changes will take effect from 6 April 2022.
A private members' bill in relation to automatic enrolment is making its way through Parliament. If passed, the bill would extend automatic enrolment to those between the ages of 18 and 22 and it would remove the lower qualifying earnings threshold (currently £6,240). Not all private members' bills are successful but this follows on from the proposals set out in the DWP's 2017 automatic enrolment review and the government has previously said that it is committed to making these changes. In other news, a different private members' bill, the Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill, is also continuing its progress through Parliament. It is currently at the committee stage in the House of Commons and will then proceed to the House of Lords. In summary, the bill clarifies that the legislation applies to survivors as well as earners; it provides for a power to set out in regulations the conditions that must be met in relation to survivors' benefits; it provides for a power to set out in regulations detail about who must consent to the conversion; and it removes the requirement to notify HMRC. Further information on this bill is set out in our weekly update of 1 December 2021.
We noted in our weekly update of 22 December 2021 that the government has launched its second state pension age review, as required under the Pensions Act 2014. The government has now published its terms of reference for that review. The terms of reference require the government to take account of various factors, including recent trends in life expectancy in every part of the UK and whether it remains right to have an expectation that people should spend a fixed proportion of adult life, on average, over state pension age. Additionally, in conducting analysis and reaching conclusions, the terms of reference require regard to both the sustainability and long-term affordability of the state pension and the views of organisations, individuals and other interested parties.
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If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.