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.
- HM Revenue and Customs (HMRC) has published newsletter 158. This contains more information about the abolition of the lifetime allowance (LTA) from 6 April 2024. It notes that a consolidated copy of all frequently asked questions to date will be published later this month, and that the pensions tax manual has now been updated to reflect the abolition of the LTA. The newsletter states that a second set of regulations, which will make additional technical amendments, will be made shortly, and will have retrospective effect to 6 April 2024. Accordingly, the newsletter recommends that “schemes should ensure that members are aware of the need for further legislative changes. As a result, members may need to wait until the regulations are in place before taking or transferring certain benefits. This is to ensure that their available allowances and tax position do not need to be revisited later in the year.” Trustees may wish to discuss with administrators whether any scheme members or beneficiaries will fall within the categories described in newsletter 158, and whether further information should be provided to those members concerning the possibility of deferring taking benefits. Legal advice may be required.
- Various pieces of legislation are now in force, some of which you may have forgotten about. By way of reminder, the following measures are now effective:
- The Pensions Regulator’s (TPR) general code of practice came into force on 28 March 2024
- General levy rates for occupational and personal pension schemes increased by 6.5% per annum for all scheme types from 1 April 2024
- Class 1 employees’ national insurance contribution rates have been reduced from 10% to 8% (between the primary threshold and the upper earnings limit) from 6 April 2024
- Employees who are carers became entitled to one week’s unpaid leave from 6 April 2024 – it may be appropriate to update a scheme’s family leave provisions in due course
- The Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024 came into force on 6 April 2024, along with commencement regulations that bring into force the defined benefit funding parts of the Pension Schemes Act 2021
- The lifetime allowance was abolished from 6 April 2024
- The tax rate on refund of surplus to employers was reduced from 35% to 25% on 6 April 2024
- Commencing from 6 April 2024, HMRC will make top-up payments directly to low-earning individuals saving in pension schemes using a net pay arrangement
- An order allows members of public service pension schemes to combine pension input amounts for annual allowance purposes in legacy and reformed schemes from 6 April 2024
- What is Not Yet in Force?
- We are still waiting for legislation to bring into force the provisions of the Pension Schemes (Conversion of Guaranteed Minimum Pensions) Act 2022. This tidied up the conversion provisions set out in the Pension Schemes Act 1993.
- We have no recent information on if/when the Department for Work and Pensions (DWP) will finalise regulations strengthening the notifiable events regime.
- Consultation had been expected by the end of 2023 on regulations implementing measures contained in the Pensions (Extension of Automatic Enrolment) Act 2023. This is the act that would reduce the trigger age for automatic enrolment and expand the earnings to be used in the calculation of pensionable earnings.
- We had expected legislation in relation to superfunds/defined benefit commercial consolidators to be in place by the end of 2023.
- Did you see our top 10 compliance tips on TPR’s general code of practice? Further resources on general code compliance can be found on our dedicated webpage.
If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.
