Clive Weber, Consultant, Pensions & Employee Benefits Team. Please contact Clive with any queries on this Ready Reckoner.
Clive Weber, Consultant, Pensions & Employee Benefits Team. Please contact Clive with any queries on this Ready Reckoner.
| 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 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 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 began on 10 May 2023. |
| Economic Activity of Public Bodies (Overseas Matters) Bill | Bill in House of Commons | 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) Act | Royal Assent 2 April 2023.Not yet in force. May be later this year. | Trustees reimbursing themselves out of scheme assets for TPR fines under Dashboard Regulations to constitute criminal offence. |
| PARLIAMENT | Effective Date | Effect |
| Retained EU Law (Revocation and Reform) Bill | Bill introduced on 22 September 2022. Royal Assent 29 June 2023. | 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. On 10 May 2023 the Government announced it intended to replace the Bill’s “sunset” provisions with a list of specific items of retained EU Law to be revoked The Government has since published an amended list. |
| Finance (No. 2) Bill 2022/23 (NB. Draft clauses for the next Finance Bill are due to be published on 18 July 2023) | 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 Summer 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 by Autumn 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. On 7 June 2023 the Government announced that, subject to the Bill receiving Royal Assent, the Government would consult in Autumn 2023 on implementing the changes. WB comment: timing uncertain as also depends on Regulations being made. |
| Recent Acts in force | ||
| 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 February 2023 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. These Regulations also make a minor amendment to the then Dashboards’ connection timetable. |
| 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, here for the article in May 2023 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. The December 2022 Regulations specified detailed connection deadlines including: 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, in March 2023 the Government announced a review of the timetable due to IT connection issues. On 8 June 2023 the Pensions Dashboards Amending Regulations were issued specifying a single statutory connection deadline and providing for more staging to be included in Guidance. Click here for the article in Part 4 of this Pensions Compass. |
| Disclosure of Restricted Information Order | 28 December 2022 | Enabling the Money and Pensions Service to receive restricted information from TPR. |
| RECENT COURT DECISIONS |
| 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. |
| 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 COURTS | 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. |
| 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. |
| 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. |
| Climate Change – Employers’ duties 12 May 2023 ClientEarth v Shell PLC | The environmental charity, Client Earth, 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. 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”. Click here for the article in this Pensions Compass and here for the article in May 2023 Pensions Compass. |
| Validity of amendments in absence of section 37 actuarial written confirmation 16 June 2023 Virgin Media v NTL Pensions | Virgin asked the High Court to decide whether certain scheme amendments relating to revaluation were valid. Being contracted-out, it was argued against Virgin that scheme amendments affecting contracted -out benefits should have been accompanied by written actuarial confirmation under section 37 Pension Schemes Act 1993 but it seems there was no confirmation. The case was heard on 2 May 2023 and judgment given on 16 June 2023. The High Court decided that in the absence of written actuarial confirmation the amendments in question were void. |
| FROM THE COURTS | FUTURE CASES |
| Forfeiture of pension benefits, and recouping overpayments – CMG Trustee v CGI 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. Click here for the article in this Pensions Compass (Part 2 – Pension cases in the pipeline). |
| Amending future service accrual BBC V BBC Pension Trust Limited | The BBC applied to the High Court to help interpret the scheme rules. The case was heard in May 2023 and judgment is awaited. Click here for the article in Part 2 of this Pensions Compass – Pension cases in the pipeline). |
| TPR’s anti-avoidance powers: Contribution Notices Shah v TPR | The appeal against the Contribution Notices issued in 2020 was due to be heard in May 2023. Judgment is awaited. Click here for the article in Part 2 of this Pensions Compass – Pension cases in the pipeline). |
OTHER DEVELOPMENTS | |
| PPF | |
| 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, which closed on 24 March 2023. Click here for the article in February 2023 Pensions Compass. The new Code of Practice is not expected to be issued and come into force until Q4 2023 or possibly later, say in Q1 2024. 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, now to be called the General 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. On 9 March 2023 it was reported that the Single Code is likely to be laid in Parliament in Spring 2023 and would be called the “General Code”. TPR’s Corporate Plan published on 21 April 2023 now states the General Code will be launched this year – we understand this is likely to be in Q3 or Q4 of 2023. This is a mammoth undertaking by TPR – hopefully a useful and more navigable Code will result. Click here for the article in February 2023 Pensions Compass. |
| TPR blog “ESG elephant is now in the room” | TPR’s blog on 17 May 2023 contains TPR’s latest call to arms to trustees. Click here for the article in this Pensions Compass. |
| 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 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 12th January 2023 TPR updated its November 2022 Guidance on dealing with Transfer requests. On 28 March 2023 TPR published Guidance for employers and trustees in relation to Equality, Diversity and Inclusion. Wedlake Bell comment: How does your scheme match up ? |
| 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. On 11 May 2023 HMRC published an updated Standards for 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. |
| HMRC Newsletters 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 15 March 2023 Budget. HMRC updated its guidance on 27 March 2023. In their newsletter 149 published 26 April 2023 HMRC commented further. Click here for the article in May 2023 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 – 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 December 2022 Dashboards Regulations and in the light of Data Statements agreed by the Pensions Dashboard Programme (see below). In June 2023 TPR revised its Guidance in the light of the Dashboard Amendment Regulations. Click here for the article in Part 4 of this Pensions Compass. |
| FCA Regulated Pension Providers – Dashboard connection | Financial Conduct Authority required 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. This guidance is likely to be revised in light of the Dashboards Amendment Regulations. |
| 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 Pensions Dashboards. In June 2023 the Dashboards Amending Regulations were published – Click here for the article in this Pensions Compass. |
| 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. In its Report on 23 June 2023 the WPC recommends how TPR should monitor trustees using LDI and pending new governance regulations, suggests DWP should consider whether use of LDI could be restricted. |
| 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 Consultation closed on 27 March 2023, Subsequently DWP and FCA are expected to consult on proposed changes to existing Regulations to reflect VFM requirements. |
| SMALL POTS 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. |
| 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. |