Pensions Weekly Update – 27 July 2022

Authors:

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 issued a consultation on draft regulations containing the detailed requirements around funding and investment strategies for defined benefit (DB) schemes. Addressing concerns previously expressed by the pensions industry, Pensions Minister, Guy Opperman, said that the draft regulations take account of open DB schemes that are not maturing and have sufficient ongoing support. “It is not our intention that such schemes should have to undertake inappropriate derisking of their investment approaches. The intention is to have better, and clearer, funding standards, but not to move away from the strengths of a flexible scheme specific approach,” he said. The consultation also proposes that DB schemes that do not have a chair will be required to appoint one. The consultation closes on 17 October 2022. The draft regulations will be taken into account by The Pensions Regulator in shaping its second consultation on the DB funding code of practice that it plans to issue this autumn.
The government is addressing a long-running anomaly that stems from the differences in tax treatment between occupational pension contributions made via net pay and relief at source arrangements. From the tax year 2024 to 2025, HMRC will have a duty to make top-up payments to individuals who make pension contributions via a net pay arrangement if their taxable income is less than the personal allowance. HMRC will contact individuals directly. A fuller explanation is contained in HMRC’s policy paper.
A new Data Protection and Digital Information Bill (the Bill) has been introduced into Parliament. According to the Explanatory Notes, which accompany the Bill, the Bill is intended to “update and simplify the UK’s data protection framework with a view to reducing burdens on organisations while maintaining high data protection standards”. Among other things it includes proposed provisions that will reform the role and structure of the Information Commissioner’s Office, change the threshold at which organisations can refuse to respond to subject access requests (where those requests are “vexatious or excessive”) and amend the rules on international transfers and cross-border flows of personal data.
The Pensions Ombudsman has issued a factsheet setting out its approach to age discrimination complaints connected with the McCloud and Sargeant court cases, which related to the 2015 public sector pension scheme changes. The factsheet includes recommended actions that affected pension schemes can take now to provide information to members and respond to complaints.
Regulations are due to come into force on 1 October 2022 to narrow the scope of investments that count as “employer-related investments” for large master trust schemes with 500 or more participating employers. The new restrictions apply to investments relating to a scheme funder, a scheme strategist, and connected and associated persons. The DWP’s response to consultation contains further information.
The Pensions and Lifetime Savings Association and the Association of British Insurers have joined forces with 17 pension providers and schemes representing 45 million pension savers to run a campaign to boost understanding and engagement with pensions. The campaign is named “Pay your Pension some Attention” (#PensionAttention), and it will run throughout this autumn. We hope that it is hugely successful. Readers of our newsletters might have spotted some similarity between the name of this campaign and our recent thought leadership initiative, #AttentionPensions, which is aimed at trustees, sponsoring employers and industry professionals.