| PARLIAMENT | Effective Date | Effect |
| 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. Still 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 fraud including pension fraud. Having completed its House of Commons stages, the Bill had its Second Reading in the House of Lords on 1 February 2023. The Committee stage in the House of Lords started on 19 April 2023 and continues. |
| Data Protection and Digital Information (No. 2) Bill | Bill introduced on 8 March 2023 in House of Commons, replacing the original Bill. To be enacted by Winter 2023? | Updating the UK’s data protection laws, to reduce burden whilst ensuring standards. The No. 2 Bill provides a new version of the GDPR replacing the EU’s data protection laws. Numerous sets of regulations are likely to be needed before the Bill once enacted can come fully into effect. The Second Reading of the Bill in the House of Commons took place on 17 April 2023 and the Committee Stage is due for completion by 13 June 2023. |
| 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 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 Third Reading in the House of Lords on 21 April 2023. |
| Retained EU Law (Revocation and Reform) Bill | Bill introduced on 22 September 2022. Possibly Summer 2023 or much 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. The Lords Committee stage was completed on 8 March 2023 and the Report Stage was due in April 2023 but was postponed, as it seems the Government may table amendments. |
| Finance (No. 2) Bill 2022/23 | Bill introduced in Parliament on 15 March 2023. Expected into force July 2023. | Click here for article in this Pensions Compass on: • abolition of lifetime allowance charges • increase to annual allowance • increase in money purchase allowance • freezing of limit on pension commencement lump sums • permitting new pension accrual for members with ‘protection’. Other Finance (No. 2) Bill changes include: • provision for HMRC to pay top-ups directly to low earning members using net pay arrangements, equating them to members receiving tax relief at source • tax changes to support the Dormant Assets Scheme. |
| Economic Crime and Corporate Transparency Bill | Bill expected to receive Royal Assent in Spring 2023. Secondary legislation will be needed. | Tightens operation of Companies House and company structures e.g. in relation to corporate directors. |
| PARLIAMENT | Effective Date | Effect |
| Pensions (Extension of Automatic Enrolment) (No. 2) Bill | House of Commons stages completed. House of Lords stages underway. Royal Assent expected Spring 2023. | This Bill, which was originally a Private Member’s Bill, now has Government backing. It gives the Secretary of State power to make Regulations extending auto-enrolment to all jobholders aged at least 18 in place of current minimum age of 22 years and removing the lower qualifying earnings threshold. WB comment: timing uncertain as also depends on Regulations being made. |
| 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 | 6 June 2022 in full | 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 |
| DB schemes – Funding and Investment Strategy Amendment Regulations | Timing uncertain – may be late 2023 or Spring 2024 | DWP Consultation on draft Regulations opened in July 2022 and closed October 2022 and DWP response awaited. The Regulations will reflect the significant amendments to the Pensions Act 2004 scheme specific funding regime made by the Pension Schemes Act 2021. 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 awaited | 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 long overdue. Click here to listen to our December 2021 Podcast. |
| Recent Regulations | ||
| DC schemes – Default funds illiquid assets: Administration, Investment, Charges and Governance and Pensions Dashboard Amendment Regulations | Regulations came 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 and requiring relevant DC Schemes to disclose and explain their policy in respect of illiquid investments. Click here for article in December 2022 Pensions Compass. Statutory Guidance has also been published. |
| 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 this Pensions Compass and here for the September 2022 Pensions Compass article. |
| Money Purchase Statements Disclosure Amendment Regulations | 1 October 2022 | Provisions for simpler annual benefit statements for members of auto-enrolment schemes and for scheme trustees/managers to have regard to published statutory guidance. |
| Fiduciary Managers and Investment Consultations – Amendment Regulations | 1 October 2022 | Amendment 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. However, this timetable is now under review following the Government’s announcement on 2 March 2023 that the first staging deadline of 31 August 2023 is deferred pending resolving IT issues. An update is expected prior to Parliament’s summer recess in July 2023. |
| 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 |
| 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 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. |
| 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 below re 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. Query, whether HMRC will appeal. |
| Forfeiting arrears due to members more than 6 years ago, and trustees recouping overpayments 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. The employer 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 not more than 6 years previously and even though the members concerned were unaware of their claims. The High Court upheld the employer’s view and also explained how the legislation relating to trustees recouping overpayments from future pension works. On 24 February 2023 the scheme trustees were given permission to appeal to the Court of Appeal. The appeal hearing has been listed for the 10 or 11 October 2023. NB forfeiture and recoupment are complex legal 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 February 2023 Pensions Compass. |
| FROM THE COURT | RECENT DECISIONS |
| 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. Decision awaited. |
| 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). |
| Creditor’s right to force draw down pension Manolete Partners PLC v White High Court 16 March 2023 | Whether the Court should direct a member, a former director of a company, to draw his pension to satisfy the creditor’s claim for breach of director’s duties. The Court so ordered saying that section 91(2) Pensions Act 1995 was no bar as the member was to be paid his pension, albeit it would then be used by his creditor. |
| FROM THE COURT | FUTURE CASES |
| Forfeiture of pension benefits, and recouping overpayments – CMG Trustee v C GI Limited | As mentioned above, permission given on 24 February 2023 to appeal the 11 August 2022 High Court decision. The Court of Appeal hearing is due on 10 or 11 October 2023. |
| Validity of amendments in absence of section 37 actuarial written confirmation – Virgin Media v NTL Pensions | Virgin is asking the Court to decide whether certain scheme amendments are valid. Being contracted-out, the scheme amendments should have been accompanied by an actuarial confirmation under section 37 Pension Schemes Act 1993 but it seems there was no confirmation. |
| Employer’s duty to implement energy translation plan Client Earth v Shell PLC. | Client Earth allege that Shell’s Board of Directors have failed to implement an energy transaction plan aligning with targets in the Paris Agreement. Click here for the article in this Pensions Compass. |
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 February 2023 Pensions Compass. |
| TPR | |
| 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, closed on 24 March 2023. Click here for the article in February 2023 Pensions Compass. The new Code of Practice is not expected to come into force until April 2024, click here for the article in this Pensions Compass. 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. |
| 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 intends to launch the Code this year. This is a mammoth undertaking by TPR – hopefully a useful and more navigable Single Code will result. Click here for the article in February 2023 Pensions Compass and here for the article in this Pensions Compass. |
| TPR Policies on its enforcement powers under Pension Schemes Act 2021 | 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 and DWP – Memorandum of Understanding re prosecution of new criminal offences | On 7 February 2023 TPR and DWP entered into a Memorandum of Understanding with DWP up to which body would prosecute criminal offences under Pension Schemes Act 2021. In general, the prosecutor will be TPR. |
| TPR blog for employers and trustees on “Refinancing risks in the current economic climate” | Click here for the article in September 2022 Pensions Compass. |
| TPR further Guidance | On 12th January 2023 TPR updated its Guidance on dealing with Transfer requests published on 8 November 2023. On 28 March 2023 TPR publishes Guidance for employers and trustees in relation to Equality, Diversity and Inclusion. |
| 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. |
| HMRC Newsletter re: March 2023 Budget | On 16 March 2023, HMRC issued newsletter 148 relating to the abolition of the lifetime allowance charge and other changes announced in the Budget on 15 March 2023. Subsequently HMRC has issued further guidance. Click here for the article in this Pensions Compass on the Budget 2023 changes. |
| PENSIONS DASHBOARDS | |
| PASA | April 2022 – PASA Guidance on Pensions Values for Dashboards. August 2022 – Updated PASA Guidance on their proposed Data Matching Convention, with addendum published march 2023 March 2023 – interim guidance re member queries on Pensions Dashboards |
| TPR Consultation on its Dashboards Compliance and Enforcement Policy | TPR’s Consultation opened on 24 November 2022 and closed on 24 February 2023. |
| TPR updated Guidance on Dashboards | On 21 March 2023 TPR updated its Dashboards Guidance to reflect the Dashboards Regulations (see under ‘Parliament’) in this Pensions Compass and in the light of Data Statements agreed by the Pensions Dashboard Programme (see below). |
| 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 closed on 16 February 2023. |
| DWP Guidelines – Deferring Staging | December 2022 – Finalised DWP Guidance for schemes seeking to defer their Dashboard staging date. This is allowed only in in very limited circumstances. |
| PDP Design Standards for Qualifying Dashboard commercial operators | December 2022 – Consultation closed 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. |
| Delay in Dashboards Staging Deadlines | On 2 March 2023 the Government announced a delay in Staging date due to IT issues. The Government says it remains committed to Dashboards and will issue an update prior to Parliament’s summer recess in July 2023. Wedlake Bell comment: all a bit vague – we wait to see what length of delay the Government has in mind ! |
| DWP | |
| 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 22 March 2023 TPR stated that going forward it would collect more data on schemes LDI funds to help monitor systemic risk and to develop standards for LDI investment. The Bank of England’s financial Policy Committee has published recommendations for maintaining resilience This follows on from the severe dislocation in the gilt market in autumn 2022 and the knock- on for some schemes LDIs portfolios, leading to Bank of England action. On 24 April 2023 the FCA issued guidance to fund managers on the same date TPR issued guidance to trustees. Legislation may eventually be introduced. |
| Value for Money (“VFM”) for DC Pensions | On 30 January 2023 DWP, FCA and TPR issued a joint Consultation to obtain views on the “metrics, standards and public disclosure” of data required under the proposed VFM framework. The Consultation closed on 27 March 2023, subsequently DWP and FCA are expected to consult on proposed charges to existing Regulations to reflect VFM requirements. |
| DWP – Consultation “Addressing the Challenges of deferred Small Pots” | On 30 January 2023 DWP launched a further call for evidence on a seemingly intractable problem – amalgamating a deferred pensioner’s small pots of deferred pension benefits. The Consultation closed on 27 March 2023 and we await the Government’s proposals. |