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What's New in GPT

Welcome to the latest updated version of The Guide for Pension Trustees – March 2019

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.

Since the last update there has been a growing debate over the merits of consolidating smaller pension schemes, prompted largely by the DWP consultation paper on consolidation of Defined Benefit schemes published just before Christmas. The debate has been ongoing in various formats for a couple of decades, but the latest consultation paper, with its focus on proposed new superfunds, has added a new dimension. Concerns have been expressed about the security of member benefits in a vehicle run as a commercial entity, and without the capital requirements imposed upon insurance companies. The publication by The Pensions Regulator of a guide to regulating the new entities has similarly failed to assuage concerns.

Also at the time of writing, the Brexit saga looks far from settled, despite the looming date for the UK’s exit. The seemingly growing possibility of a ‘no deal’ exit has prompted the Government to publish papers in a number of areas detailing the likely impact of such an outcome. In the pensions area, these include provisions for pension schemes that cross the border in the island of Ireland, and for state benefits for UK nationals living in the EU and EU nationals living in the UK. If those come into force, to the extent that they affect matters covered in The Guide, they will be included in the next update.

PPF kept busy

Meanwhile the Pension Protection Fund has been busy with a number of developments in recent months. These include:

  1. The PPF is concerned that those running Defined Benefit schemes for small and medium-sized employers do not have the same opportunities to become involved with the development of PPF policy as their larger cousins. Consequently a new forum has been established specifically to allow views to be expressed. It will be convened on a six-monthly basis. [See 16.10.1 (Note)]

  2. Last year the Court of Justice of the European Union (formerly the ECJ) ruled that in certain circumstances the compensation provided by the PPF could fall below the legal minimum level of compensation required by the EU. The PPF therefore implemented changes which were designed to increase the level of compensation in certain circumstances. However, a new legal challenge has been mounted against the PPF’s changes, which has brought an element of uncertainty to payments for the near future, until the case is decided. Until then, the changes that the PPF had intended to make will be scaled back – possibly temporarily – to ensure that there is no possibility of any overpayment, which would require a reclaim from the member in the future. [See 16.10.10]

  3. The new compensation cap figures for 2019/20 have been announced. [See 16.10.9 (Note)].

Welsh taxpayers identified

Scheme administrators will already be familiar with the need to differentiate between Scottish taxpayers and those of the remainder of the UK, due to the power of the Scottish Parliament to apply different tax rates to their citizens. Administrators will probably also know that the Welsh Assembly acquires similar powers from April 2019.

Consequently, HMRC’s individual information to schemes from January now specifically identifies Welsh taxpayers, as well as Scottish ones. The former have a ‘C’ designation, in the same way that Scottish citizens have an ‘S’. [See 10.1.1(a) (Note)

Legal challenge to female SPA changes

The process of equalising the State Pension Ages of men and women is now virtually complete. This has involved bringing the SPA for women up from 60 to 65 over time and then on upwards together – the latter as a reaction to increasing longevity. Although the equalisation process was announced in advance, there has been criticism that affected women were not given sufficient notice to be able to make the alternative arrangements necessary to cope with the financial consequences of their State pension becoming payable from a later date.

This point has been taken up by a group called ‘BackTo60’ which has started a legal challenge for a judicial review of the government’s actions. The High Court has granted a hearing, which is scheduled to take place in June 2019. If the court finds against the government, the cost and administrative consequences could be significant. [See 1.1.7(v)

New weapon in the war against pension scams

As the business of scamming people out of their pension benefits continues to grow, the government has responded with a new piece of legislation aimed at reducing the opportunity for scammers to target victims. A ban on cold calling by telephone has been proposed for some time, and many have accused the government of dragging its heels on introducing the necessary legislation.

However, with effect from 9 January 2019 the Electronic Communications (Amendment) (No. 2) Regulations 2018 finally introduced the ban. [See 17.4.10]

Single Financial Guidance Body

As trailed in the last update, the guidance responsibilities of the Money Advice Service (MAS), The Pension Advisory Service (TPAS) and Pension Wise have been combined into a new organisation, called the Single Financial Guidance Body, which assumed its responsibilities on 1 January 2019. The Guide now fully reflects the change and contains contact details for this important new body. [See 24.3.9]

Pensions Dashboard confirmation

The government is working with the industry to develop a portal through which members will be able to access details of all their pension entitlements. This is a major undertaking, which has been under development for a number of years. Of course, the dashboard will only work effectively if all entitlements, from all sources, are available and up to date. This will be a massive task, particularly since schemes have many different bases for recording their members’ benefits, which are not necessarily compatible with those of other schemes. In order for the dashboard to work, there will have to be some standardisation, therefore. The costs to schemes of implementing whatever becomes the standard basis could be considerable, so understandably many are reticent about the process, despite the potential benefits to their members of a single system.

The government has now confirmed the intention to compel schemes to participate in the dashboard. However, in recognition of the difficulties and costs involved for all schemes to comply, the timeline for the introduction of compulsion is currently uncertain. [See 11.4.7(b)]

I hope you find the updates useful.

Kevin LeGrand

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

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