Part 6 – Pensions Ready Reckoner

07 / 12 / 2020

PARLIAMENT
Forthcoming Legislation DateEffect
Pension Schemes BillRoyal Assent expected by 31 December 2020The Bill is progressing speedily through Parliament and includes the expected new criminal offences for persons recklessly dealing with DB schemes, as well as introducing collective defined contribution schemes; restrictions on statutory transfers; new funding and investment strategy requirements for DB schemes; pension dashboard provisions and enabling power to impose climate change obligations on scheme trustees.
Finance Bill 2020-2021Expected effective date 6 April 2021Includes tax changes to enable collective money purchase benefits schemes under the Pension Schemes Bill (see above) to become registered pension schemes under Finance Act 2004.
Draft Governance and Registration Amendment Regulations Delayed The Regulations to amend pensions law to align with the Competition & Markets Authority Order 2019 relating to investment consultants and fiduciary managers are still awaited.
New Pensions Bill 2021 – not yet published Unknown The Pensions Minister has stated the Government intend to legislate to provide for the proper authorisation and regulation of DB Superfunds – see our article in this issue of Pensions Compass “Quick review of Superfunds” .
New Pensions Bill 2021?Unknown On 3 September 2020 the Government confirmed its intention to increase the minimum early retirement pension age for men and women from age 55 to age 57 in 2028 (by then State Pension Age will be age 67).
FORTHCOMING COURT DECISIONS
Topic Effect
Incorrect amendments?
Axminster Carpets
High Court, March 2021
Does the absence of confirmation under section 37 Pension Schemes Act 1993 (that the “reference scheme” contracting-out test would be met notwithstanding the amendments) invalidate the amendments?
SIPP loss claims
Adams v Options
Court of Appeal, 2 March 2021
Whether the SIPP provider and administrator is liable to the SIPP member for investment loss where the member decided to invest in store pods. The High Court decided that the contract was ‘execution only’ and there was no liability.
FCA authorisation
FCA v Avacade
Court of Appeal
On 30 June 2020 the High Court decided that the two unregulated introducer companies were in breach of Regulation 19 of the Financial Services and Markets Act 2020. An application to appeal to the Court of Appeal was made on 27 August 2020.
PPF compensation
Hughes v PPF
Court of Appeal?
The PPF and the DWP have applied to appeal the High Court decision in June 2020 that the PPF age cap is invalid and as to the High Court’s decision on the PPF’s methodology. See our “Hughes v Pension Protection Fund” article in September 2020 Pensions Compass
Improper investment
Garner v Dalriada
Court of Appeal?
On 23 June 2020 the Pensions Ombudsman held the sole Trustee of the Norton Motorcycles Pension Scheme personally liable for loss arising from the Trustee’s investment in Norton Motorcycles preference shares. Mr Garner as Trustee had failed to take proper advice and had not diversified the Scheme’s investments. On 2 July 2020 Mr Garner applied to appeal the High Court decision.
FROM THE COURTS
TopicForthcoming Decisions
RPI/CPI
Britivic plc v Britivic Pensions
Court of Appeal
On 17 January 2020 the High Court held that based on the wording of the scheme rules Britvic plc could not
reduce the rate of increases for pensions in payment and a change could produce upward increases only.
Britvic plc’s appeal is due to be heard before 18 May 2021.
Incorrect amendments?
Mitchells & Butlers
High Court, June/July 2021
Whether an amending deed adding the words in relation to pension increases “or any other rate decided by the
principle employer” validly gave the principal employer this unilateral power.
FROM THE COURTS
TopicRecent Decisions
Rectification
SPS Technologies
High Court, 11 September 2020
Successful application for correction of scheme rules by the quick summary judgment route. Please see our article “Rectification of errors in your scheme documents” in September 2020 Pensions Compass and our article published in the November 2020 edition of Pensions Today.
GMP sex equalisation
Lloyds Bank
High Court, 20 November 2020
In 2018 the High Court left open the impact of GMP sex equalisation on Transfers. The hearings on Transfers took place in May and October 2020. On 20 November 2020 the High Court ruled how Transfers should be treated for GMP sex equalisation purposes – see our article “Transfers and GMP Equalisation – Clarity at last?” in this issue of Pensions Compass .
OTHER DEVELOPMENTS
TopicEffect
TPR Guidance to Trustees – “Protecting schemes from sponsoring employer distress”On 12 November 2020, TPR issued new Guidance to trustees regarding the profound effect of COVID-19 on many businesses, and also highlights TPR’s expectations of trustees in the context of corporate transactions.
RPI – HM Treasury and UKSA Response to Consultation On 25 November 2020, the Chancellor of the Exchequer explained plans to reform RPI, in light of their earlier Consultation. Please see our article in this Pensions Compass “RPI – light at the end of the tunnel?” .
Superfunds – Further TPR Guidance In October 2020, TPR issued further Guidance to employers and trustees on TPR’s expectations for transfers from DB schemes to Superfunds. See our article in this Pensions Compass “Quick review of Superfunds”.
Regulation of Pensions Tax Advice – HMRC’s proposals November 2020HMRC have summarised responses to its March 2020 Consultation “Raising standards in the tax advice market”. There will be a further HMRC Consultation in 2021 on requiring tax advisers to have appropriate professional indemnity insurance and on how to define “tax advice” for this purpose.