Happy New Year! Here is our summary of key legal and regulatory developments over the last couple of weeks that are relevant to occupational pension schemes, which you might have missed, with links for further information.
On 20 December 2023, HM Revenue and Customs (HMRC) published a lifetime allowance guidance newsletter, which provides an update on technical issues relating to the abolition of the lifetime allowance (LTA) from 6 April 2024. It also provides further information about how provisions of the Finance Bill 2023-24, which relate to the LTA abolition, are intended to operate.
The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2024 has been laid before Parliament for approval by resolution of both the House of Commons and the House of Lords. The order, if approved, will come into force on 11 March 2024. It categorises the operation of a pensions dashboard that connects to the dashboards digital architecture of the Money and Pensions Service as a regulated activity. This means that a dashboards provider must be authorised under the Financial Services and Markets Act 2000 or must be exempt. The order does not apply to the Money and Pensions Service.
Also on dashboards, the Pensions Dashboards (Prohibition of Indemnification) Act 2023, which received royal assent in May 2023, amends section 256 of the Pensions Act 2004. It extends the prohibition on indemnification out of assets of the pension fund to include indemnities in relation to any penalties imposed under pensions dashboards regulations. Commencement regulations brought the prohibition into force on 1 January 2024.
In our weekly update on 8 November 2023, we noted that the Court of Appeal had decided that The Pensions Ombudsman (TPO) is not a competent court for the purposes of enforcing a TPO determination, in relation to the recovery of overpaid pension under section 91(6) of the Pensions Act 1995; a county court order for enforcement is currently required. TPO has now published a factsheet explaining the effect of the Court of Appeal judgment and how TPO will assist pension trustees who need to apply to the county court for an enforcement order. TPO will do this by providing a certified copy of the TPO determination, which will set out a repayment schedule for the recovery of overpaid pension. TPO reports that the Department for Work and Pensions (DWP) intends to introduce legislation that would give TPO power to bring an outstanding overpayment dispute to an end without the need for a county court order.
TPO has published a corporate plan for 2023-26. It looks at progress made during 2022-23 and looks ahead to the next three years and expected demand for TPO’s services. TPO anticipates potential complaints in due course arising out of the implementation of the McCloud judgment in the public sector (in which the Court of Appeal ruled that younger members of the judicial and firefighters’ pension schemes had been unlawfully discriminated against because protections for older members did not apply to them), and GMP equalisation generally.
Congratulations to the winner of our pensions festive word search! The answers are now available. Thank you to all those who took part.
If you would like specific advice on any of these issues or on anything else, please contact a member of our Pensions team. We wish all of our clients and contacts a happy and healthy 2024.