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What's New in GPT

Welcome to the latest updated version of The Guide for Pension Trustees.

The Guide for Pension Trustees aims to keep its readers up to date with changes in legislation and regulation, and with developments in practice, that affect pension trustees and others concerned in the management of pensions.

Introduction – Stop Press: Busy times to continue!

Since our last update, there has been a flurry of new proposals and consultations, showing that there is no let-up in prospect for the foreseeable future in changes to pensions schemes. Issues being reviewed include:


a new ‘approved’ methodology for equalising scheme benefits for the effect of GMPs that would be more equitable and practical than previous proposals [see 1.7.10]


a proposal to allow schemes to invest for social benefit purposes, even where that might result in lower returns [see 18.2.6 (j) (Note)]


new tools to fight pension scams, including proposals to ban cold calling to sell pension investments [see 17.4.10]


consideration of easing the rules on bulk transfers of Defined Contribution pensions without member consent, to make such transfers easier to achieve [see 17.3.3].

On top of that, there is to be a new, comprehensive Green Paper on Defined Benefit schemes during 2017 – and continued uncertainties from impending Brexit…

New items covered in The Guide

The Pensions Regulator’s Integrated Risk Management tool

As part of a focus on trying to improve the security of Defined Benefit schemes, the Regulator is strongly encouraging schemes to formulate and adopt an integrated risk management process. This recognises that the three fundamental risk areas for schemes – employer covenant, investment and funding – are interrelated and that trustees need to be able to understand the effect changing one has on the others [see 14.9.17].

Publications from the Employer Covenant Working Group (ECWG)

Also on the subject of the employer covenant there are new guides published by the ECWG [see 14.9.11 ].

Improving the quality of Defined Contribution schemes

The Pensions Quality Mark has now acquired a sister in the Retirement Quality Mark. This is intended to recognise the new choices that are being made available to members of Defined Contribution schemes (if schemes choose to offer them) and the resultant need to encourage high standards that are comparable with those covered by the Pensions Quality Mark. [1.11.37 and 1.11.38 give details].

Income Payment Orders (IPO) accessing pension benefits

There have been conflicting legal authorities on the circumstances in which an IPO can be used to access a bankrupt’s pension benefits. The position now settled by the Court of Appeal decision in the case Horton v Henry, is that the circumstances are limited.  [See 6.1.10 ].

Items introduced or slated for introduction in 2017

Cap on early exit charges from Defined Contribution schemes
In order to remove potential disincentives for members to exercise new rights to access their Defined Contribution funds before their normal pension age, investment products will be subject to a capping of their exit charges. This is intended to come into force in October 2017, for occupational schemes [see 18.5.9].

Reduction in the Money Purchase Annual Allowance
Where a member accesses their Defined Contribution funds but subsequently wishes to start saving for additional pension, the annual allowance for tax relief is reduced from the pre-retirement level (currently £40,000 per annum) to £10,000. Subject to any changes to detail following the consultation, it is intended to reduce this allowance further, to £4,000 per annum, from April 2017. [1.14.9 (v) sets this out]

An additional report item to The Pensions Regulator
In response to repeated survey results showing schemes falling short of the Regulator’s expectations on standards of record keeping, there will be a new requirement from 2017 to include a report on record keeping in the annual return to the Regulator under the Exchange system [see 5.1.6 ].

Pension Protection Fund compensation improvement

The enhancement of compensation for claimants who had long service in defunct Defined Benefit schemes to which they belonged is finally in force, backdated to April 2016. [See 16.10.9 (c)]

I hope that you find the latest iteration of The Guide for Pension Trustees helpful.

Kevin LeGrand

If you have any questions about this Update, please contact the Helpdesk on 0800 980 1332, or email

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