Pensions Weekly Update – 20 December 2023

December 2023
Region: Europe

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

  • The Pension Protection Fund (PPF) has published its policy statement and levy rules for the 2024-25 levy year. The PPF has confirmed a levy estimate of £100 million (which is half the levy estimate for 2023-24). The PPF says that it expects that 99% of defined benefit pension schemes will pay less levy in 2024. As part of the original consultation, the PPF explained that the amount of reduction it may make to the levy each year is constrained because of the way in which legislation operates. Legislation currently prevents levy increases of more than 25% each year, which means that if the PPF were to reduce the levy any lower, it might face difficulties increasing the levy amount if required in the future. The PPF says that the Department for Work and Pensions has agreed to revisit the legislation as soon as parliamentary time allows. The key levy deadlines are similar to previous years. Pension scheme returns and contingent asset certificates must be submitted on Exchange before midnight on 31 March 2024, and supporting contingent asset documents must be submitted to the PPF by email before 5 p.m. on 2 April 2024.
  • The Pensions Ombudsman (TPO) has published its report and accounts for 2022-23. The report notes an increasing demand for TPO’s services, with the number of complaints received increasing by 17% from 6,216 in 2021-22 to 7,280 in 2022-23. The Pensions Dishonesty Unit published its first determination during the period. The report includes a table of closed matters categorised into different types of complaints. Last year, most complaints related to administration. For this year (2022-23), most complaints related to contributions.
  • In December 2022, the government consulted on the VAT treatment of fund management. The consultation related to the VAT exemption in EU and UK law, in relation to special investment funds (including certain pension funds, i.e. defined contribution pooled funds). HM Revenue and Customs (HMRC) had allowed taxpayers to choose between relying on exemptions under either the direct effect of EU law, or the exemptions set out in the VAT Act 1994. The government has published its outcome of consultation. It says that following consultation and individual engagement with certain stakeholders, it has established that existing UK VAT legislation covers the vast majority of fund types for which management services should be VAT exempt, and that it provides the industry with sufficient legal certainty. The government says that it has noted the request for greater definition in this area and will take this forward as part of the review of current guidance. It will focus on providing additional clarity in relation to the current legal position and will not incorporate proposals from some respondents to widen the existing definition.
  • Commencement regulations bring parts of the Retained EU Law (Revocation and Reform) Act into force. Schedule 1 to the act, which sets out the retained EU legislation that will be sunsetted, will come into force immediately before the end of 2023. Other provisions relating to the abolition of the supremacy of EU law, the abolition of the general principles of EU law, the use of the term “assimilated law” instead of “retained EU law” and the use of incompatibility orders by the courts will come into force on 1 January 2024.
  • Have you tried our pensions festive word search? There is a £50 Amazon gift card for the winner. It is open for entries until 5 p.m. today!
  • We wish you season’s greetings over the festive break. Our weekly update will return in January 2024.

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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