Please contact Clive with any queries on this Ready Reckoner.
| PARLIAMENT | Effective Date | Effect |
| Bills (and Acts not yet in force) | ||
| Pension Schemes Bill | King’s Speech 17/7/2024. Parliamentary timetable awaited. | Includes consolidation of DC small pots, values test for DC arrangements; trustees of DC occupational schemes to provide retirement solutions including default investment options, and Superfund legislation. Click here to read the article in Part 1 of this Pensions Compass. |
| GMP Conversion – Conversion of GMPs Act (Royal Assent 28/4/2022) | Not yet in force | Facilitates converting GMPs when relevant Regulations made. Still awaiting DWP’s Consultation on draft Regulations. Click here for article in June 2022 Pensions Compass. |
| Digital Information and Smart Data Bill. | King’s Speech 17/7/2024. Parliamentary timetable awaited. | To harness data power for economic growth. Includes modernising and strengthening Information Commissioner’s office. Query, how far the Bill will adopt at least part of the lapsed Data Protection and Digital Information bill, see above. |
| Cyber security and Resilience Bill | King’s Speech 17/7/2024. Parliamentary timetable awaited. | Strengthening cyber security defences. The government acknowledges that the UK legislation is outdated. The Bill may in part draw on the lapsed Data Protection and digital Information Bill. |
| Audit reform and Corporate Governance Bill | King’s speech 17/7/2024. Parliamentary timetable awaited. | The Bill is intended to pave the way for robust scrutiny of large companies by auditors and greater transparency of their finances. The Financial Reporting Council will be replaced by a new Regulator, the Audit, Reporting and Governance Authority with greater powers. WB comment: potentially assists employer covenant assessment. |
| Recent Acts in force | ||
| Finance Act 2024 | Royal Assent 22 February 2024 with effect from 6 April 2024 | Replaces Lifetime Allowance with new Lump Sum Allowance and Lump Sum and Death Benefit Allowance. Click here for the article in Part 1 of March 2024 Pensions Compass. |
| Pensions Dashboards (Prohibition of Indemnification) Act 2023 | Royal Assent 2 April 2023, into effect 1 January 2024 – Pensions Dashboards Prohibition Regs SI 2023/1414 | Trustees reimbursed out of scheme assets for TPR fines under the Dashboards Regulations constitutes a criminal offence if they know or have reasonable grounds to believe they have been reimbursed. |
| Economic Crime and Corporate Transparency Act 2023 | Royal Assent 26 October 2023 | Tightens operation of Companies House and company structures e.g. in relation to corporate directors. Regulations laid in Parliament brought many provisions into force on 26 April 2024. |
| Online Safety Act 2023 | 26 October 2023 | Hopefully will assist in combating fraud including pension fraud. |
| Pensions (Extension of Automatic Enrolment) (No. 2) Act 2023 | Royal Assent 18 September 2023 | Empowers Secretary of State to make Regulations (1)extending auto-enrolment to all jobholders aged at least 18 in place of the current minimum age of 22 years, and (2) removing the lower qualifying earnings threshold. The Act requires the Secretary of State to consult on the Regulations -Consultation awaited. |
| Financial Services and Markets Act 2023 | Royal Assent 29 June 2023 | Updates the UK’s framework for financial services. |
| Forthcoming Regulations (including expected Regulations) | ||
| DB schemes – Funding and Investment Strategy Amendment Regulations 2024 | Laid in Parliament 29 January 2024 and came into force 6 April 2024 | Regulations reflect significant amendments to the Pensions Act 2004 scheme specific funding regime by Pension Schemes Act 2021. Click here for the article in Part 2 of March 2024 Pensions Compass. The finalised Regulations adopt a more flexible approach for open schemes and facilitate productive investment in line with the Government’s “Mansion House” proposals. On 29 July 2024 TPR’s revised Funding Code of Practice was laid in Parliament. Click here for the article in Part 2 of this 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 2024 or 2025 | 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 awaited. Click here to listen to our December 2021 Podcast. |
| Extension of Automatic Enrolment Regulations | Timing uncertain | See above under Pensions (Extension of Automatic Enrolment) (No. 2) Act 2023 |
| Recent Regulations | ||
| Authorised Surplus Payments Charge (Variation Rate) Order 2024 | 6 April 2024 | Reduces the amount of tax due on authorised surplus repayment from 35% to 25%. Click here for the article in Part 4 of December 2023 Pensions Compass. |
| Regulations relating to Abolition of Lifetime Allowance Charge | 6 April 2024 | These Regulations make numerous changes to Finance Act 2024. Further Regulations are expected. Click here for the article in Part 4 of June 2024 Pensions Compass. |
| Regulated Activities Amendment Order – Operators of pensions dashboards | 11 March 2024 | The Order authorises the Financial Conduct Authority to regulate commercial operators of pensions dashboards. Such operators must either be or become authorised by the FCA. |
| Pensions Dashboards Amendment Regulations 2023 | 9 August 2023 | Click here for the article in December 2022 Pensions Compass and here for the article in March 2022 Pensions Compass. The December 2022 Regulations specified statutory connection deadlines. However, in March 2023 the Government announced there were IT connection problems. The August 2023 Pensions Dashboards Amendment Regulations amend the December 2022 Regulations and specify a single statutory connection deadline of October 2026 with staging to be included in Guidance as published on 25 March 2024. Click here for the article in Part 3 of June 2024 Pensions Compass. |
| RECENT COURT DECISIONS | |
| FROM THE COURTS | RECENT DECISIONS |
| Corporation tax deductions re UURBS disallowed AD Bly v HMRC Upper Tax Tribunal 22 April 2024 | The Upper Tribunal disallowed CT deductions on basis that the primary purpose of the arrangements was to reduce tax without incurring actual expenditure. |
| Conflict of interest Irwin Mitchell Trust Corporation v The Public Guardian Court of Protection 19 March 2024 | Whilst not a pension case, the decision is of interest in that the fiduciary (the trust corporation managing X’s affairs) had appointed a related investment company as investment manager of X’s funds. The Court held that the risk of conflict had not been extinguished. Case adjourned for further evidence. |
| Final salary underpin Newell Trustees v Newell Rubbermaid 23 January 2024 | In context of conversion to money purchase, the High Court upheld the final salary underpin but based on actuarial value. Click here for the article in Part 5 of March 2024 Pensions Compass on this interesting decision. |
| Final salary underpin Avon Cosmetics v Dalriada & Others 17 January 2024 and 19 February 2024 | Using “severance” principles the High Court upheld the switch to CARE benefits for future service, but for past service members should receive the better CARE and final salary linked benefits. On 19 February 2024 the Court approved a compromise agreement as to implantation of the underpin. Click here for the article in Part 5 of March 2024 Pensions Compass. |
| Tax treatment of facilitation payments E.ON UK v HMRC Court of Appeal 7 November 2023 | Whether employer payments to employees regarding adverse pension scheme changes are taxable. The First-Tier Tribunal ruled, yes. The Upper Tribunal ruled, no, on the basis that the payments were not “from” the employment. The Court of Appeal reversed the Upper Tribunal decision and agreed with the First – Tier Tribunal that the payments to employees were subject to income tax and NICs. |
| Recouping overpayments Pensions Ombudsman v CMG 1 November 2023 | Court of Appeal unanimously decided the Pensions Ombudsman was not a “competent court”; scheme trustees need to obtain a county court order to recoup overpaid pension from future pension payments. Click here for the article in Part 4 of December 2023 Pensions Compass. On 19 December 2023 in a complaint involving the AECOM Group Pension Scheme the Pensions Ombudsman gave effect to the CMG decision and on 20 December 2023 published its views on the CMG decision. See also the Pensions Ombudsman’s detailed decision in the case of Mr E and the Bic UK Pension Scheme 19 April 2024 – click here for the article in Part 1 of this Pensions Compass. |
| Surplus on winding up Standard Life Trustee 1 August 2023 | Decision of Inner House of Court of Session of Scotland in the context of the scheme rules which were silent on the point, the Court decided the surplus should be held on resulting trust for the current employers. Click here for the article in Part 2 of October 2023 Pensions Compass. |
| Trustee’s petition to wind up scheme’s sponsoring employers Brass Trustees v Goldstone and PPF 31 July 2023 | High Court approval given to scheme trustee to issue petition to wind up the scheme’s sponsoring employers. |
| Employer’s appeal about alteration powers BBC v BBC Pension Trust & Another 9 July 2024 | On 28 July 2023 the High Court decided that, based on the scheme rules, members’ “interests” extend to future benefits as well as past. On 9 July 2024 the Court of Appeal unanimously upheld the High Court decision. Click here for the article in Part 3 of this Pensions Compass. |
| TPR’s anti-avoidance powers: Contribution Notices Shah v TPR 28 July 2023 | On 28 July 2023 the Upper Tribunal upheld Contribution Notices issued in 2020 and dismissed Mr Shah’s appeal. Click here for the article in Part 2 of July 2023 Pensions Compass – Pension cases in the pipeline. |
| Tax relief denied on in specie member contributions Killick & Co LLP v HMRC First Tier Tribunal (“FTT”) 28 July 2023 | The FTT upheld HMRC’s withdrawal of tax relief for in specie member contributions under the Killick & Co SIPP, following the Upper Tax Tribunal’s decision in Sippchoice on 12 May 2020. |
| Climate Change – Trustee Directors’ duties McGaughey v USS Court of Appeal, 21 July 2023 | The Court of Appeal dismissal appeals: the two pension scheme members could not bring a derivative action obliging the corporate trustee to pursue an action against its directors for various alleged failures to move the pension scheme away from investing in fossil fuels. Click here for the article in Part 1 of October 2023 Pensions Compass. |
| Validity of amendments in absence of section 37 actuarial written confirmation Virgin Media v NTL Pensions 25 July 2024 | Virgin Media asked the High Court to decide whether certain scheme amendments relating to revaluation were valid. It was argued the scheme amendments affecting contracted -out benefits should have been accompanied by written actuarial confirmation under section 37 Pension Schemes Act 1993. The Court was asked to assume there was no actuarial confirmation. On 16 June 2023 the High Court decided that, in the (assumed) absence of written actuarial confirmation, the amendments in question were void. On 25 July 2024 the Court of Appeal unanimously upheld the High Court’s decision. Click here for the article in Part 3 of this Pensions Compass. |
| Climate Change – Employers’ duties 12 May and 24 July 2023 ClientEarth v Shell PLC | The environmental charity, ClientEarth, sought Court permission to bring a claim against the board of Directors of Shell PLC, alleging the board had failed to implement an energy transition plan aligning with targets in the Paris Agreement. On 12 May 2023 on the papers, the Court refused permission saying that the evidence “falls some way short of establishing a prima facie case that the way in which Shell’s business is being managed by the directors could not properly be regarded by them as in the best interests of Shell’s members as a whole”. After a subsequent oral hearing, the High Court on 24 July 2023 confirmed its original decision. Click here for the article in Part 1 of October 2023 Pensions Compass; click here for the article in July 2023 Pensions Compass; and here for the article in May 2023 Pensions Compass. ClientEarth has announced it will seek permission to appeal the High Court’s latest decision. |
| Tax – Employer/Trustee Transactions Morgan Lloyd v Trustees HMRC First Tier Tribunal 31 March 2023 | The FTT upheld the tax charges on the transactions involving sale of Intellectual Property to the pension scheme and certain loans. |
| 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. On 11 April 2024 the Court of Appeal permitted postponement of the appeal to give the appellant time to raise funds, as on a pre-reading of the papers the Court considered the appeal raised seriously arguable points and of wider potential importance to occupational pension schemes. On 4 July 2024 the appeal was heard by the Court of Appeal, judgment awaited. |
| 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 corrective 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. See above for the Court of Appeal’s decision on 1 November 2023 on the need for a County Court Order. NB forfeiture and recoupment are complex legal areas on which legal advice is essential. Click here for the article in Part 4 December 2024 Pensions Compass and here for the article in Part 1 of June 2024 Pensions Compass. |
| Age Discrimination Fire Brigades etc v HM Treasury | On 10 March 2023 the Court ruled that the Government’s cost control method was correct. The Unions request for judicial review was rejected by the Court of Appeal on 17 April 2024. |
| FROM THE COURTS | FUTURE CASES |
| Scheme amendments Verity Trustees Ltd v Wood To be listed after 1 October 2024 | Application by the sole trustee of the Pensions Trust requesting Court directions about restrictions on the scheme’s amendment power. |
| PPF | |
| Consultation on Levy Rules for 2025/2026 | On 12 September 2024 the PPF published its Consultation on its Levy Rules for the PPF Levy Year 2025/2026. The Consultation closes on the 23 October 2024. |
| Response to DWP Consultation (see immediately below) to PPF acting as a public Consolidator for appropriate schemes | Subject to safeguards, in its Response on 19 April 2024 the PPF confirmed it was in principle willing to act as a public consolidator. The King’s speech on 17 July 2024 did not refer to this. |
| DWP | |
| 2023 Consultation on Options for Defined Benefits Schemes | Following the 2024 Autumn Statement (click here for the article in Part 2 of December 2023 Pensions Compass), on 23 February 2024 the DWP issued a Consultation on changing the law by 2026 (1) to make it easier for trustees of private sector schemes to make payments to sponsoring employers and members out of surplus; and (2) to provide for the Pension Protection Fund to operate as a public consolidator for schemes unattractive to commercial providers. The Consultation on both proposals closed on 19 April 2024. The King’s Speech on 17 July 2017 did not mention the surplus aspect. |
| Treasury | |
| Government Pensions Review | Following the launch of the Government’s Review on 20 July 2024, the Treasury jointly with DWP and the Ministry of Housing Communities and Development issued on 16 August 2024 the Terms of Reference for phase one of the Review. Phase one will focus on developing the Government’s policy in four specific areas, concentrating initially on investment and reporting on this later in the year ahead of the introduction of the Pension Schemes Bill. On 4 September 2024 the Treasury’s Call for Evidence asked for views by 25 September 2024 on consolidation and investment matters re DC workplace schemes and the Local Government Pension Scheme. |
| TPR | |
| TPR’s Pensions Dashboards Compliance and Enforcement Policy | On 5 September 2024 TPR published its Policy in this area including examples of TPR’s approach in 4 scheme scenarios. |
| TPR encourages DC trust based schemes to respond to VFM (Value For Money) Consultation | On 8th August 2024 the FCA issued a Consultation on VFM. Although it relates to FCA regulated contract-based schemes, the Consultation proposals are also designed to be suitable for application across the DC workplace pensions market. On 29 August 2024 TPR called on trust -based DC schemes to consider and respond to the Consultation. The Consultation closes on the 17 October 2024. |
| TPR blogs on Climate Change | TPR’s blogs: 29 August 2023 “How trustees can help make climate scenario analysis decision – useful”. TPR urges trustees to improve their climate reporting – click here for the article in Part 1 of October 2023 Pensions Compass. Click here for our article in Part 3 of July 2023 Pensions Compass on TPR’s blog on 17 May 2023 “ESG elephant is now in the room”. TPR published a further blog on 21 February 2024 entitled “Trustees, take stock and plan for wider ESG risks and opportunities.” |
| TPR’s new DB Funding Code of Practice | On 29 July 2024 TPR’s new DB Funding Code of Practice was laid in Parliament and is due to come into force in early October 2024. Click here for the article in Part 2 of this Pensions Compass. |
| TPR’s updated Guidance on Superfunds | This now includes TPR’s expectations on release of capital. The Guidance is likely to operate for a significant period. Superfunds are to be put on a statutory footing under the Pension Schemes Bill but this may be a long legislative process. Click here for the article on the Pension Schemes Bill in Part 1 of this Pensions Compass. |
| TPR’s Single Code of Practice, now called the General Code of Practice | On 10 January 2024 the General Code of Practice was laid in Parliament and took effect on 27 March 2024. Click here for the article in Part 3 of March 2024 Pensions Compass. |
| 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. On 11 May 2023 HMRC published an updated Standards for Agents. On 6 March 2024 HMRC published a further Consultation on strengthening the regulatory framework. The Consultation closed on 29 May 2024. |
| New Allowances replacing the Lifetime Allowance: HMRC Guidance Newsletters and HMRCs revision of the Pensions Tax Manual | Click here for the article in Part 1 of March 2024 Pensions Compass and here for the update article in Part 4 of June 2024 Pensions Compass. In its Newsletter 162 published on 17 September 2024 HMRC confirmed that further Regulations will be made “as soon as parliamentary time allows.” |
| PENSIONS DASHBOARDS | |
| Pensions Dashboards Programme (PDP) – Technical Standards | In September 2024 the PDP issued Technical Standards containing mandatory requirements for the interaction of parties and their interaction with the PDP’s central digital architecture. |
| PDP Code of Connection | On 21 August 2024 PDP issued version 1.1 of its Code of Connection explaining how pension providers and schemes are to connect to dashboards and to remain connected. |
| TPR – Updated Checklist for trustees | On 12 April 2024, TPR reissued its Checklist for schemes preparing for Pensions Dashboards. |
| Staging Guidance | Issued by DWP on 25 March 2024. Click here for the article in Part 3 of June 2024 Pensions Compass. |
| OTHER DEVELOPMENTS | |
| DC SMALL POTS | On 30 January 2023 DWP called for evidence on amalgamating deferred pensioner’s small pots. The Consultation closed on 27 March 2023. On 11 July 2023 the DWP Response and further Consultation proposed a Consolidator model under which Government would create a clearing house to match pots to member followed by allocation to consolidators; members would be given choice where possible; pots would be eligible for consolidation after 12 months of the last contribution with such pots being no larger than £1000. This further Consultation closed on 5 September 2023. An initiative on small pots was announced as part of the then Chancellor’s Autumn Statement on 22 November 2023. The new Pension Schemes Bill is to cover small pots, Click here for the article in Part 1 of this Pensions Compass. |
| CITY CODE ON TAKEOVERS and MERGERS Updated Code | On 20 May 2023 the Panel on Takeover and Mergers published the eleventh edition. As before, pension scheme trustees have a seat at the ring in the case of certain proposed corporate activity. |
| BANK OF ENGLAND | |
| Bank of England concern regarding Reinsurance overseas by UK insurers in the buy-out market | The Prudential Regulation Authority, supervisory arm of the Bank of England, has issued a Consultation on the risks of UK insurers reinsuring with overseas reinsurers. The Consultation closed on 16 February 2024. |
| TREASURY | |
| Pension fund clearing exemption | In November 2023 the Treasury published a Call for Evidence (closed on 5 January 2024). Pension funds are currently free to contract bilaterally e.g. for derivative contracts. The Call for Evidence examines whether this should continue, or whether there should be an obligation to clear such transactions through central counterparties, which may require ‘variation margin’ as collateral to be provided in cash. |
| HOUSE OF COMMONS WORK AND PENSIONS COMMITTEE (WPC) | On 17 April 2024 the WPC’s letter to the Pensions Minister suggested various areas of enquiry to help the Government clarify fiduciary duties in relation to climate change. |