| PARLIAMENT | Effective Date | Effect |
| Forthcoming Bills (and Acts not yet in force) | ||
| GMP Conversion – Conversion of GMPs Act (Royal Assent 28/4/2022) | Not yet in force | Will facilitate converting GMPs once relevant Regulations made. Awaiting DWP’s consultation on the Regulations. Click here for article in June 2022 Pensions Compass. |
| Online Safety Bill | Will be enacted by Summer 2023? | Hopefully will assist in combating pension fraud. The House of Commons Third Reading took place on 17 January 2023. |
| Data Protection and Digital Information Bill | Bill introduced 19 July 2022, into force Spring/Summer 2023 | Updating the UK’s data protection laws, to reduce burden whilst ensuring standards. |
| Boycotts, Disinvestment and Sanctions Bill | Bill due to be published | Obliges public bodies including, it seems, the Local Government Pension Scheme to conduct procurement and investment activity in ways not contrary to Government policy. |
| Pensions Dashboards – Prohibition of Indemnification Bill | Expected to come into force in Spring/Summer 2023 | Trustees reimbursing themselves out of scheme assets for TPR fines under Dashboard Regulations to constitute criminal offence. Following completion of the House of Commons stages, the Bill had its First Reading in the House of Lords on the 24 January 2023. |
| Retained EU Law (Revocation and Reform) Bill | Bill introduced on 22 September 2022. Possibly Summer 2023 or later. | Replacement of EU retained law by end of 2023 or by June 2026 latest and assimilation into UK law. UK Courts regard to EU law to be lessened. The House of Commons stages were completed on 18 January 2023 and the Bill is now in the House of Lords (Committee Stage expected 23 February 2023). |
| PARLIAMENT | Effective Date | Effect |
| Extension of Automatic Enrolment Bill | Second reading in House of Commons expected on 17 March 2023. | This Private Member’s Bill extends auto-enrolment to all jobholders aged at least 18 in place of current minimum age of 22 years and removes the lower qualifying earnings threshold. |
| For Finance Bill 2022-2023 | Draft Finance Bill clauses published 20 July 2022. Finance Bill is expected to be published in Spring 2023, Royal Assent expected July 2023. | Specifies basis for making top up payments direct to low earning individuals where individuals paying pension contributions under a net pay arrangement (for tax year starting 6 April 2024 and onwards). |
| Recent Acts in force | ||
| Finance Act 2022 | April 2022 | Various measures including re: • transfer of dormant assets, see below; • scheme administrators’ paying members’ annual allowance charges; and • increase in NMPA from age 55 to age 57 from 6 April 2028 (click here for article in February 2022 Pensions Compass) |
| Dormant Assets Act | 27 May 2022 and later | To reunite individuals with ‘lost’ financial assets including lost life insurance and retirement income policies, and where not possible, providing for social and environmental uses. |
| Forthcoming Regulations (including expected Regulations) |
| PARLIAMENT | Effective Date | Effect |
| DC schemes – Default funds illiquid assets: Administration, Charges and Governance Amendment Regulations and Statutory Guidance | Regulations expected to come into force on 6 April 2023 | DWP Consultation opened October 2022 and closed 10 November 2022. Encouraging scheme trustees to invest part of auto-enrolment Default funds in illiquid assets, such as infrastructure funds. Click here for article in December Pensions Compass. |
| DB schemes – Funding and Investment Strategy Amendment Regulations | Timing uncertain – may be late 2023. | DWP Consultation opened in July 2022 and closed October 2022 and DWP response awaited. Significant amendments to the Pensions Act 2004 scheme specific funding regime. Click here for the article in this Pensions Compass and here for the article in September 2022 Pensions Compass. |
| GMP Conversion Regulations | Timing uncertain, Consultation on draft Regulations may be in Q1 2023 | See above under Conversion of GMPs Act |
| Notifiable Events Amendment Regulations | Timing uncertain – may be late 2023 | Additional Events to be notified to TPR and to scheme trustees (change in control of an employer, sale of material proportion of business or assets and/or granting of certain security rights). DWP’s Consultation on these proposed controversial Regulations closed on 27 October 2021 and DWP’s Response is overdue. Click here to listen to our December 2021 Podcast. |
| Recent Regulations |
| PARLIAMENT | Effective Date | Effect |
| Climate Change – Governance and Reporting Amendment Regulations | 1 October 2022 | In scope schemes to measure their alignment with Paris Agreement climate goal “so far as they are able to”. Click here for the article in September 2022 Pensions Compass. |
| Fiduciary Managers and Investment Consultations – Amendment Regulations | 1 October 2022 | Alignment of pension legislation (scheme administration regulations 1996) relating to trustees’ use of fiduciary managers and investment consultations with 2010 Order made by the Competition and Markets Authority. |
| Pensions Dashboards Regulations | 12 December 2022 | Click here for the article in December 2022 Pensions Compass and here for the article in March 2022 Pensions Compass. Large schemes (minimum 1000 active/deferred members at the relevant date) to connect to the Dashboard in stages between April 2023 to September 2024 and Medium Schemes between October 2024 and October 2025. |
| Disclosure of Restricted Information Order | 28 December 2022 | Enabling the Money and Pensions Service to receive restricted information from TPR. |
| FROM THE COURTS | RECENT DECISIONS |
| Interpreting Revaluation provisions De La Rue Pension Scheme High Court, 14 January 2022 | The employer’s interpretation of the Scheme’s revaluation rule for deferred pensions namely revaluation in line with minimum statutory requirements, was the preferred interpretation. A reminder to ensure clarity in scheme rules. |
| Death Benefits Punter Southall v Benge and Barrett High Court, 1 February 2022 | The independent trustee concluded, having obtained supportive legal advice, that a luxurious lifestyle with the deceased member still meant the claimant was dependent on the deceased member for the “necessaries” of life. The High Court approved the trustee’s decision. Click here for the article in March 2022 Pensions Compass. |
| TPR fixed penalty notice Ease & Co v TPR First-Tier Tribunal, 31 January 2022 | The Tribunal dismissed the company’s appeal against TPR’s fixed penalty notice. The company failed to prepare its scheme’s annual governance statement and the company’s lack of knowledge of the statutory requirement was not a reasonable excuse. |
| TPR escalating penalty notice Davey West Ltd v TPR First Tier Tribunal, 10 February 2022 | TPR’s Unpaid Contributions Notice lead to TPR issuing a fixed penalty notice and subsequently an escalating penalty notice, for failure to pay auto-enrolment contributions for a 6 month period. Click here for the article in February 2022 Pensions Compass (the review and appeal process) and here for the article in June 2022 Pensions Compass on recent cases in the First Tier Tribunal where the employer’s defence of reasonable excuse also failed (Kingswear Gallery v TPR and Morecombe Bay Wines v TPR). |
| TPR contribution notice (“CN”) Dosco Pension Scheme TPR Regulatory Report 31 March 2022 | On 31 March 2022 TPR reported on the CN issued in August 2021 against the scheme’s former German parent company. Besides demonstrating TPR’s beyond the UK, this is the first example of a CN amount including amounts in respect of lost investment returns and interest aimed at compensating the UK pension scheme. Click here for the article in June 2022 Pensions Compass. |
| Whether Actuarial Valuation valid and other matters McGaughey & Davies v Trustee of Universities Superannuation Scheme (USS) High Court, May 2022 | Application to High Court to bring proceedings against the USS for alleged breach of duties in relation to Valuation and other matters and as to the validity of proposed benefit cuts. On 24th May 2022 the High Court refused permission for the claims to be pursued. |
| FROM THE COURTS | RECENT DECISIONS |
| Debts owed by member – Creditor enforcing against personal pensions (1) Bacci v Green, High Court 7 March 2022 (2) Brake v Guy High Court 11 July 2022; (3) Lindsay v O’Loughnane High Court 14 July 2022 | Broad overview: these three High Court cases relate to where scheme member X is legally due to pay Y – can X be forced to drawdown on his personal pension to enable X to pay Y? The Court’s broad answer was, yes. It granted Y injunctions to force X to drawdown (in the Bacci case, subject to the existing pension sharing order in favour of the member’s former wife). Our specialist Insolvency Team can assist in such cases (see also the Wilson v McNamara case where Wedlake Bell act for the scheme trustee). In Bacci v Green the debt arose out of the member’s fraud and so the Order for payment of the debt survived Mr Green’s bankruptcy and remained in force. On 8 November 2022 the Court of Appeal upheld the High Court’s decision. |
| Tax treatment of facilitation payments E.ON UK v HMRC Upper Tribunal July 2022 | Whether employer payments to employees re: adverse pension scheme changes are taxable. The First-Tier Tribunal ruled, yes. The Upper Tribunal ruled, no. |
| Forfeiture of pension benefits and recovering over-payments CMG Trustee v CGI Limited High Court, 11 August 2022 | Members had been paid extra pension benefits in the past following the scheme’s sex equalisation process and other scheme amendments. On behalf of the employer it was argued that the arrears paid were too great and should in accordance with its reading of the scheme’s rule be limited to amounts due no more than 6 years previously and even though the members concerned were unaware of their entitlement and ability to make a claim. The Court upheld the employer’s view. The Trustee then wished to recover the overpayments from future pension due to the members concerned – the Court explained how the legislation relating to recouping overpayments out of members’ future pension works. Forfeiture and Recoupment are complex areas on which legal advice is essential. |
| RPI/CPIH Judicial Review High Court 1 September 2022 | In 2021, three pension schemes announced judicial review proceedings relating to the Government’s decisions in 2019/2020 to align the basis of RPI with CPIH from 2030 and without any compensation. Click here to see our article in December 2020 Pensions Compass “RPI – light at the end of the tunnel”. In its judgment on 1 September 2022, the High Court upheld the Government’s decisions. |
| Corrections Viavi Solutions UK High Court 22 September 2022 | Good explanation of the circumstances in which the Court will order Rectification (correction) of scheme rules. Click here for the article in this Pensions Compass. |
| OTHER DEVELOPMENTS | |
| Age Discrimination: Pre-December 2006 Benefits Beattie v 20-20 Trustee Services Employment Appeal Tribunal, 7 November 2022 | On DWP’s appeal, the EAT decided that age discrimination claims for pre 1 December 2006 benefits brought before 31 December 2020 (the end of the further implementation period for the EU Withdrawal Act 2018) succeeded but not claims made after this date. |
| Bankruptcy Wilson v McNamara and Others Court of Appeal 16 January 2023 | The trustees in bankruptcy appealed the High Court’s decision on 15 February 2022, arguing there is justification for not shielding the Irish pension scheme from the English bankruptcy (the High Court had decided the Irish pension scheme rights were beyond the English trustees in bankruptcy’s reach, click here for the article in the June 2022 Pensions Compass). The Court of Appeal unanimously upheld the High Court’s decision: the justification arguments had been raised far too late and could not now be heard. In the absence of any further appeal, it seems Mr McNamara’s pension rights under his Irish pension scheme are safe (Wedlake Bell acts for the pension scheme trustees). |
OTHER DEVELOPMENTS | |
| PPF | |
| PPF Levy Rules for Levy Year starting 1 April 2023. | The PPF Levy Rules for the Levy Year 2023/2024 and Policy Statement were published in 13 December 2022. Click here for the article in this Pensions Compass. |
| TPR | |
| Dealing with Transfer Requests | On 12 Januay 2023 TPR updated its 2021 Guidance. |
| TPR’s Consultation on its proposed new DB Funding Code of Practice | On 16 December 2022, TPR published its Consultation on its proposed DB Funding Code of Practice, closes on 24 March 2023. Click here for the article in this Pensions Compass. The new Code of Practice are not expected to come into force until Q4 2023. The new Code is ancillary to the proposed Regulations amending the Pensions Act 2004 scheme specific funding regime – see under Parliament in this Ready Reckoner. |
| TPR Regulatory Report | January 2023 – TPR announced no further action re Carillion Group’s 2018 insolvency. |
| OTHER DEVELOPMENTS | |
| TPR’s draft Single Code of Practice | On 17 March 2021, TPR consulted on amalgamating its existing 15 individual Codes into a Single New Code. The Consultation closed on 26 May 2021. On 24 August 2021 TPR published its interim response. In light of the numerous comments received, TPR has not set a firm publication date for the new Single Code to be laid in Parliament. It is unlikely to be effective before Summer 2023. This is a mammoth undertaking by TPR – hopefully a useful and more navigable Single Code will result. Click here for the article in this Pensions Compass. |
| TPR’s anti-avoidance Policies | In May 2022 TPR issued: – a consultation on its proposed Enforcement and Prosecution Policies (Consultation closed 24th June 2022); and – finalised Policies on High Fines (up to £1 million). In October 2022 TPR finalised its Enforcement and Prosecution Policies and published its Enforcement Strategy. |
| TPR’s views on trustees’ Climate Change obligations | In December 2021 TPR finalised its Guidance on TPR’s approach to trustees’ compliance with the Climate Governance and Reporting Regulations which came into force on 1 October 2021. TPR has since updated its Guidance to reflect changes to the Regulations requiring schemes in scope to apply a measurement metric. See above under Parliament Recent Regulations. |
| Conflict in Ukraine – TPR Guidance | TPR Guidance for trustees from the investment and employer covenant perspective on events in Ukraine. Click here to read our article in March 2022 Pensions Compass. |
| TPR blog for employers and trustees on “Refinancing risks in the current economic climate” | Click here for the article in September 2022 Pensions Compass. |
| OTHER DEVELOPMENTS | |
| HMRC | |
| Regulation of Pensions Tax Advice – HMRC’s proposals | On 23 March 2021 HMRC proposed that all tax advisers should have mandatory professional indemnity insurance, and how to define “tax advice” for these purposes. The Consultation closed on 15 June 2021. Subsequently HMRC announced it would not pursue mandatory insurance. HMRC continues to consider how best to protect consumers and to regulate tax advisers including tax agents. |
| HMRC Newsletter on GMP Equalisation and Tax | HMRC’s Newsletter of 6 April 2022 gives some guidance on the tax treatment of Transfer Top – ups including where a Top – up is paid direct to a member as a lump sum. Some modest guidance on GMP conversion is also included. Click here for the article in June 2022 Pensions Compass. |
| VAT | HMRC Consultation on VAT treatment of fund management services. Consultation opened on 9 December 2022 and closed on 3 February 2023. |
| PENSIONS DASHBOARDS | |
| PASA | April 2022 – PASA Guidance on Pensions Values for Dashboards. August 2022 – Updated PASA Guidance on their proposed Data Matching Convention. |
| TPR Consultation on its Dashboards Compliance and Enforcement Policy | TPR’s Consultation opened on 24 November 2022 and closes on 24 February 2023. |
| FCA Regulated Pension Providers – Dashboard connection | Financial Conduct Authority requires Dashboard connection for FCA regulated pension providers by 31 August 2023. |
| OTHER DEVELOPMENTS | |
| Data Standards – Pensions Dashboards Programme (PDP) | November 2022 – Data Standards issued by Money and Pensions Service (covering dashboard data requirements for pension providers and schemes) for finding and viewing pensions information. |
| FCA regulatory requirements for commercial operators of Dashboard Services | December 2022 – FCA issues a Consultation on regulating firms seeking to offer Pensions Dashboards services. It is proposed such firms will need FCA authorisation. The Consultation closes 16 February 2023. |
| DWP Guidelines – Deferring Staging | December 2022 – Finalised DWP Guidance for schemes seeking to defer their Dashboard staging date. This is allowed in in very limited circumstances. |
| PDP Design Standards for Qualifying Dashboard commercial operators | December 2022 – Consultation closes 16 February 2023. The proposed design standards for commercial operators of Dashboards is separate from but designed to complement the FCA’s regulatory framework for Dashboards commercial operators, see above. |
| DERIVATIVES Schemes using liability driven investment (LDI) | On 24 October 2022 the House of Commons’ Work and Pensions Committee (WPC) announced an Enquiry into pension funds with hedging portfolios. Click here for the article in December 2022 Pensions Compass on derivative investments. In the WPC Committee hearing on 14 December 2022, TPR stated that going forward it would collect more data on schemes LDI funds to help monitor systemic risk. TPR’s letter 20 January 2023 to the WPC outlined TPR’s thoughts on further tightening re schemes LDI arrangements. |