| 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 | Facilitates converting GMPs when relevant Regulations made. Still awaiting DWP’s Consultation on draft Regulations. Click here for article in June 2022 Pensions Compass. |
| Data Protection and Digital Information Bill | Bill introduced on 8 March 2023 in House of Commons, replacing the original Bill. Bill lost due to 2024 General Election. | Updating the UK’s data protection laws, to reduce burden whilst ensuring standards. The Bill provides a new version of the GDPR replacing the EU’s data protection laws. Numerous sets of regulations are likely to be needed. The Bill completed its House of Commons stage but was still in the House of Lords when the General Election was called. Click here for our General Election article in Part 4 of this Pensions Compass. |
| Economic Activity of Public Bodies (Overseas Matters) Bill | Completed passage through House of Commons on 10 January 2024 and went to the House of Lords. Bill Lost/stood over due to General Election. | Obliges public bodies including, it seems, the Local Government Pension Scheme to conduct procurement and investment activity in ways not contrary to Government policy. The Bill (previously named the Boycotts, Disinvestment and Sanctions Bill) completed its House of Commons stage and was in the House of Lords when the General election was called. Click here for article in Part 4 of this Pensions Compass. |
| 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 4 of this 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. |
| Retained EU Law (Revocation and Reform) Act 2023 | Royal Assent 29 June 2023 | Retained EU law to be revoked by 31 December 2023. For Regulations restating certain parts of EU Retained Law otherwise revoked by 31 December 2023, see below under Recent Regulations. |
| Financial Services and Markets Act 2023 | Royal Assent 29 June 2023 | Updates the UK’s framework for financial services. |
| Finance (No.2) Act 2023 | 6 April 2023 | Click here for article in July 2023 Pensions Compass on: • abolition of lifetime allowance charges • increase to annual allowance • increase in money purchase allowance • freezing of limit on tax free lump sums • permitting new pension accrual for members with ‘protection’. • marginal rate income tax on certain lump sums in excess of the lifetime allowance |
| 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 this 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 28 February 2024 TPR announced its revised DB Funding and Investment Code of Practice is due to be published in Summer 2024, see below under “TPR”. |
| 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 this 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. |
| Regulations restating Retained EU Law otherwise lost by 31 December 2023 | 18 September 2023 Regulations, in force 31 December 2023 | Various Regulations retaining in UK law certain effects of EU law including the upshot of the ‘Hampshire’ case regarding calculating PPF compensation. |
| 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 this 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. |
| Trustee asks Court about alteration powers BBC v BBC Pension Trust & Another 28 July 2023 | The High Court decided that, based on the scheme rules, members’ “interests” extend to future benefits as well as past. It is reported that on 15 September 2023 the BBC were given permission to appeal to the Court of Appeal. The appeal is due to be heard on 25 June 2024. Click here for the article in Part 2 of October 2023 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 16 June 2023 | Virgin 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. For the purposes of the case the Court was asked to assume there was no actuarial confirmation. The case was heard on 2 May 2023 and judgment given on 16 June 2023. The High Court decided that, in the (assumed) absence of written actuarial confirmation, the amendments in question were void. Permission to appeal to the Court of Appeal has been granted and the case is due to be heard on 24 or 25 June 2024. Click here for the article in Part 2 of October 2023 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. |
| 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 this Pensions Compass. |
| FROM THE COURTS | FUTURE CASES |
| 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 appeal was heard by the Court of Appeal on 20 February 2024 and judgment is awaited. |
| Scheme alterations BBC v BBC Pension Trust | As mentioned above under “Recent Decisions”, the BBC has been given permission to appeal to the Court of Appeal against the High Court’s decision on 28 July 2023. The Appeal Court hearing is due on 25 June 2024. |
| Scheme alterations Virgin Media | As mentioned under “Recent Decisions”, the Appeal Court hearing against the High Court’s judgment is due on 24 or 25 June 2024. |
| PENSIONS OMBUDSMAN | |
| Sex equalisation Mrs E – Avis UK Pension Plan Pensions Ombudsman 29 April 2024 | Retrospective amendment in 1992 held valid in absence of section 67 and express scheme restrictions. WB comment: query whether determination consistent with then EU law. |
| PPF | |
| PPF Levy for 2024/2025 | On 14 December 2023 the PPF published its final rules with guidance and forms for the PPF Levy Year 2024/2025. |
| 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. |
| DWP | |
| 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; 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. WB comment: given the upcoming General Election, there is considerable uncertainty over both the content and timing of any new primary legislation to achieve these goals. |
| General Levy review | DWP’s Consultation on the General Levy opened on 2 October 2023 and closed on 13 November 2023. Three different options are put forward for Levy Years 2024/25, 2025/26 and 2026/27. Government’s decision is awaited. |
| TPR | |
| 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 revised Code of Practice for DC schemes | On 25 August 2023, TPR published the revised Code of Practice No. 13 re schemes providing money purchase benefits plus ancillary detailed Guidance relating to Communications and Reporting, and DC Investment Guidance. The updated Code and Guidance reflect the impact of legislative changes in recent years. |
| 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 as to which body would prosecute criminal offences under Pension Schemes Act 2021. In general, the prosecutor will be TPR. |
| TPR further Guidance | On 28 March 2023 TPR published Guidance for employers and trustees in relation to Equality, Diversity and Inclusion. On 10 August 2023 TPR issued updated Guidance on Superfunds, recognising that the Government’s intention to legislate for Superfunds and its Call for Evidence regarding other consolidation options will take time. Click here for the Mansion House Reforms article in Part 4 of October 2023 Pensions Compass and here for an update in Part 2 of December 2023 Pensions Compass. On 6 November 2023 it was announced TPR had cleared the first superfund transaction with Clara Pensions relating to the Sears Retail Pension Scheme. On 7 December 2023 TPR explained its approach to protecting pension schemes during merger and acquisition transactions. On 11 December 2023 TPR published updated guidance on cyber security. On 24 January 2024 TPR issued new Guidance on trustees’ private market investments. |
| TPR’s proposed new DB Funding Code of Practice | On 16 December 2022, TPR consulted on its proposed DB Funding Code of Practice (closed on 24 March 2023) Click here for the article in February 2023 Pensions Compass. On 28 February 2024 TPR announced the Code would be finalised and laid in Parliament in Summer 2024 and would apply to DB scheme valuations at the same time as the Funding and Investment Strategy Regulations (see above under Parliament) which apply to actuarial valuations on and after 22 September 2024. On 5 March 2024 TPR published its Consultation on Statements of Strategy for DB scheme funding. The Consultation closed on 16 April 2022 – Click here for the article in this Pensions Compass. In Summer 2024 TPR is expected to publish its parameters for fast track treatment of valuations and to consult on its covenant guidance. Click here for the article in Part 4 of this Pensions Compass on impact of the 2024 General Election. |
| TPR’s Annual Funding Statement 2023 | This Annual Statement provides an update on TPR’s thinking on scheme Valuations, especially Valuations in the year from 22 September 2022. |
| 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 our Update published on 17 January 2024 and here for the article in Part 2 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 | HMRC’s commentaries on the Lump Sum Allowance and the Lump Sum and Death Benefit Allowance. Click here for the article in Part 1 of March 2024 Pensions Compass. |
| PENSIONS DASHBOARDS | |
| Pensions Dashboards Programme (PDP) – Update October 2023 | PDP’s October 2023 Update confirms PDP is working on the draft Guidance for connection staging ahead of the statutory connection deadline of 31 October 2026. PDP are extensively testing their systems. It seems public access to Pensions Dashboards is unlikely much before 31 October 2026. |
| 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 this Pensions Compass. |
| OTHER DEVELOPMENTS | |
| DC VALUE 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 idea is to drive better retirement outcomes for DC members in relation to investment performance, costs and charges and quality of services and to support the consolidation of underperforming and poorly run schemes. The Consultation closed on 27 March 2023. The Government’s Response on 11 July 2023 supports these aims. DWP and FCA are expected to consult on proposed changes to existing Regulations to reflect VFM requirements but the government response set no timetable for this. |
| 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. WB comment: a grand design but legislation and bringing into effect is probably years away. Likewise, the initiatives on small pots announced as part of the Chancellor’s Autumn Statement on 22 November, click here for the article in Part 2 of December 2023 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. |
| “MANSION HOUSE” REFORMS – Chancellor’s announcements on 10 July 2023 and Autumn Statement on 22 November 2023. | Major potential changes to the pensions landscape announced. With a General Election no later than January 2025, will there be time to make much headway? Possibly not. Click here for our News Bulletin issued on 18 July 2023 and here for our Bulletin issued on 24 November 2023. Click here for the article in Part 4 of October 2023 Pensions Compass and here for our Update on the Mansion House reforms in Part 2 of December 2023 Pensions Compass. |
| 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. |