| PARLIAMENT | Effective Date | Effect |
| Forthcoming 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. Awaiting DWP’s consultation on the Regulations. Click here for article in June 2022 Pensions Compass. |
| Online Safety Bill | Bill in House of Commons. Will be enacted by Summer 2023 ? | Hopefully will assist in combating pension fraud. |
| Data Protection and Digital Information Bill | Bill introduced 18 July 2022, into force Spring/Summer 2023 | Updating the UK’s data protection laws, to reduce burden whilst ensuring standards. |
| Boycotts, Disinvestment and Sanctions Bill | Bill due to be published late 2022 | 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 Spring/Summer 2023 | Trustees reimbursing themselves out of scheme assets for TPR fines under Dashboard Regulations to constitute criminal offence. |
| Retained EU law Reform and Revocation Bill | Bill introduced on 22 September 2022. Possibly Summer 2023 or 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. |
| Extension of Automatic Enrolment Bill | Second reading in House of Commons expected on 25 November 2022 | This Private Member’s Bill extends auto-enrolment to all jobholders aged at least 18 in place of current minimum age of 22 years and removes the lower qualifying earnings threshold. |
| For Finance Bill 2022-2023 | Draft Finance Bill clauses published 20 July 2022. Finance Bill is expected to be published in Spring 2023, Royal Assent expected July 2023. | Specifies basis for making top up payments direct to low earning individuals where individuals paying pension contributions under a net pay arrangement (for tax yearstarting 6 April 2024 and onwards). |
| 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 | 27 May 2022 and later | 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 those made but not yet in force) | ||
| Pensions Dashboard Regulations 2022 | Due to come into force on 12 December 2022 | Click here for the article in this Pensions Compass and here for the article in March 2022 Pensions Compass. See below for our list of key Pensions Dashboard documents. It is presently envisaged that large schemes (minimum 100 active/deferred members) will need to connect to the Dashboard between April 2023 to September 2024, with a timetable in 2024/2025 and onwards for smaller schemes. The October 2022 Pensions Dashboards Programme Update Report describes the testing in which some organisations are participating. [INSERT LINKS] |
| DC schemes – Default funds illiquid assets: Administration, Charges and Governance Amendment Regulations | Regulations expected shortly, to come into force on 6 April 2023 | Encouraging scheme trustees to invest part of auto- enrolment Default funds in illiquid assets, such as infrastructure funds. Click here for article in this Pensions Compass. |
| DB schemes – Funding and Investment Strategy Amendment Regulations | Timing uncertain – may be late 2023. | Proposed amendments to the Pensions Act 2004 scheme specific funding regime. The Government’s Response to its Consultation on the draft regulations, and TPR’s draft new Funding Code of Practice, are both awaited. Click here for the article in September 2022 Pensions Compass. |
| GMP Conversion Regulations | Timing uncertain, Consultation may be in Q1 2023 | See above under Conversion of GMPs Act |
| Notifiable Events Amendment Regulations | Timing uncertain – may be late 2023 | Proposed 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. |
| Recent Regulations | ||
| DC auto-enrolment schemes – Statements of Benefit Regulations | 1 October 2022 | Simplified annual benefit statements to be issued to DC scheme auto-enrolled members. |
| 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 September 2022 Pensions Compass. |
| Fiduciary Managers and Investment Consultations – Amendment Regulations | 1 October 2022 | Alignment of pension legislation (scheme administration regulations 1996) relating to trustees’ use of fiduciary managers and investment consultants with 2010 Order made by the Competition and Markets Authority. |
| Topic | Effect |
| RECENT COURT DECISIONS | |
| Limitation and forfeiture ‘Axminster’ Pension Scheme High Court, 17 June 2021 | The same Judge as in the November 2020 Lloyds Bank GMP equalisation case confirmed that the Limitation Act does not apply to restrict claims by members for pension arrears as they are claims to recover trust property. However, scheme rules may limit such claims depending on their wording. Click here for our review of the Axminster case in July 2021 Pensions Compass, and see below for our case report on the CMG High Court decision on 11 August 2022. |
| Interpreting Revaluation provisions De La Rue Pension Scheme High Court, 14 January 2022 | The employer’s interpretation of the Scheme’s revaluation rule for deferred pensions namely revaluation in line with minimum statutory requirements, was the preferred interpretation. A reminder to ensure clarity in scheme rules. |
| 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. |
| Bankruptcy Trustees in Bankruptcy v McNamara High Court, 15 February 2022 | The High Court decided in favour of the bankrupt scheme member, an Irish citizen made bankrupt in England. The Court decided his pension rights under an Irish pension scheme were beyond the reach of his English trustee in bankruptcy. Click here for the article in June 2022 Pensions Compass. Wedlake Bell acted for the pension scheme trustees in this matter. An appeal is listed in the Court of Appeal for 13 or 14 December 2022. |
| TPR fixed penalty notice Ease & Co v TPR First-Tier Tribunal, 31 January 2022 | The Tribunal dismissed the company’s appeal against TPR’s fixed penalty notice. The company failed to prepare its scheme’s annual governance statement and the company’s lack of knowledge of the statutory requirement was not a reasonable excuse. |
| 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 six 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 TPRs 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. |
| Whether Actuarial Valuation valid and other matters McGaughey & Davies v Trustee of Universities Superannuation Scheme (USS) High Court, May 2022 | Application to High Court to bring proceedings against the USS for alleged breach of duties in relation to Valuation and other matters and as to the validity of proposed benefit cuts. On 24th May 2022 the High Court refused permission for the claims to be pursued. |
| 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 above the McNamara Bankruptcy 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. |
| Forfeiture of pension benefits and recovering over-payments 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. On behalf of the employer it was 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 no more than six years previously and even though the members concerned were unaware of their entitlement and ability to make a claim. The Court upheld the employer’s view. The Trustee then wished to recover the overpayments from future pension payments due to the members concerned – the Court explained how the legislation relating to recouping overpayments out of members’ future pension works. Forfeiture and Recoupment are complex areas on which legal advice is essential. |
| 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. |
| 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 “RIP for RPI?”. In its judgment on 1 September 2022, the High Court upheld the Government’s decisions. News of any appeal is awaited. |
| Corrections Viavi Solutions UK High Court 22 September 2022 | Good recent explanation of the circumstances in which the Court will order Rectification (correction) of scheme rules. |
| Age exception for pre – December 2006 benefits Beattie v 20-20 Trustee Services and Federal Mogul Ltd Employment Appeal Tribunal (EAT) 7 November 2022 | In a preliminary hearing at the Employment Tribunal, the Tribunal decided the exceptions for age discrimination for pre 1 December 2006 benefits were incompatible with EU law retained by the UK since Brexit. On the DWP’s appeal heard on 7 November 2022, the EAT decided that claims brought before 31 December 2020 (being the end of the further implementation period for the EU Withdrawal Act 2018) succeeded whereas for claims after this date the age exception for pre 1 December 2006 pensionable service was valid. |
OTHER DEVELOPMENTS | |
| PPF | |
| PPF Consultation on its proposed Levy Rules for Levy Year starting 1 April 2023. | The big news is that the PPF proposes to reduce its risk based levy by about half overall. It also proposes some changes to its calculation method. The Consultation opened on 29 September 2022 and closed on 10 November 2022. The PPF Levy Rules are expected to be finalised and published in December 2022. |
| TPR | |
| TPR’s Consultation on its proposed new Funding Code of Practice | TPR is waiting for Government to develop its views on amendments to the Funding and Investment Regulations (see above under Parliament, DB schemes Funding and Strategy Amending Regulations). TPR’s Consultation is expected by 31 March 2023.The Amending Regulations and the new TPR’s Code are not expected to come into force until Q4 2023. |
| 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. TPR has indicated the new Single Code is likely to be laid in Parliament soon and may come into effect before Summer 2023. WB comment: this is a mammoth undertaking by TPR – hopefully a useful and more navigable Single Code will result. |
| 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 24 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’s views on trustees’ Climate Change obligations | In December 2021 TPR finalised its Guidance on TPR’s approach to trustees’ compliance with the Climate Governance and Reporting Regulations which came into force on 1 October 2021. TPR has since updated its Guidance to reflect changes to the Regulations requiring schemes in scope to apply a measurement metric. See above under Parliament Recent Regulations. |
| Conflict in Ukraine – TPR Guidance | TPR Guidance for trustees from the investment and employer covenant perspective on events in Ukraine. Click here to read our article in March 2022 Pensions Compass. |
| 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 Consultation on Compliance and Enforcement Policy for Pensions Dashboards | On 24 November 2022 TPR issued its proposal Policy for Consultation. The Consultation closes on 24 February 2023. |
| TPR issues Guidance to DB schemes on liability-driven investment | On 30 November 2022 TPR set out recommended actions for DB scheme trustees in light of recent gilt market turmoil (click here for the article in this 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. |
| 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. This includes 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. |
| PENSIONS DASHBOARDS | |
| DWP Consultation on its proposed Dashboard Regulations and further Consultation on 28 June 2022 on two specific matters | On 28 June 2022 DWP’s Consultation asked for views on 2 specific points: (1) definition of “Dashboards Available Point” relating to when the Secretary of State can trigger the commencement of Dashboards, and (2) disclosure of information between MaPS and TPR. The Government’s approach is now reflected in the finalised Dashboard Regulations which are due to come into force on 12 December 2022 (see above under Parliament and here for the article in this Pensions Compass. |
| Pensions Dashboard Programme (PDP) | 19 July 2022 – Consultation on standards, specifications and technical requirements (closed 30 August 2022) October 2022 – PDP Progress Update including on early testing. November 2022 – PDP updated standards pending approval by the Secretary of State. |
| PASA | April 2022 – PASA Guidance on Pensions Values for Dashboards. August 2022 – Updated PASA Guidance on their proposed Data Matching Convention. |
| HOUSE OF COMMONS WORK & PENSIONS COMMITTEE (WPC) | On 24 October 2022 the WPC announced an Enquiry into pension funds with hedging portfolios. Click here for the article in this Pensions Compass on derivative investments. |