01 March 2024
5 min
See excerpts from this month's articles below (to read more, please download our latest Current Issues).
The Department for Work and Pensions (DWP) has launched a further consultation on Options for Defined Benefit Schemes. The consultation document ranges over various subjects, from amendment of the rules for surplus extraction, including the possibility of establishing a new Pension Protection Fund (PPF) compensation tier that would pay out members’ full entitlements, through to confirmation of the Government’s plans to put the authorization and supervision regime for DB superfunds on a statutory footing, and creation of a publicly operated consolidation vehicle. The consultation period runs from 23 February to 19 April 2024.
The first few weeks of 2024 brought two (or two-and-a-half) notable court judgments on a fertile source of pensions litigation: the interpretation and operation of scheme amendment powers.
The Department for Work and Pensions (DWP) has published its annual review of the earnings trigger and qualifying earnings band used for automatic enrolment for the coming tax year. The trigger, above which jobholders must be automatically enrolled, is frozen at £10,000 as it has been since 2014/15. The earnings band, on which minimum contributions are based, will remain at last year’s level (£6,250 to £50,270) in line with the Lower and Upper Earnings Limits for National Insurance purposes.
The Government has concluded, following a call for evidence, that no changes should be made to the alternative quality requirements that employers with Defined Benefit (DB) and hybrid schemes can use to demonstrate that they meet the minimum standard for auto-enrolment.
The Financial Markets Law Committee (FMLC), a registered charity, published a report in early February on pension scheme trustees’ fiduciary duties and decision-making in relation to sustainability and climate change. It gives a general explanation of the legal position and the difficulties and uncertainties that exist.
The House of Commons Work and Pensions Committee held an oral evidence session on fiduciary duty on 21 February 2024. The hearing was broken into two sessions: the first involving ShareAction, Make My Money Matter, Pensions For Purpose, and the UK Sustainable Investment & Finance Association; later, we heard from the Pension and Lifetime Savings Association, the Universities Superannuation Scheme, the Institute and Faculty of Actuaries and the Association of Professional Pensions Trustees.
In a recent blog, the Pensions Regulator has urged trustees to ‘take stock and plan for wider ESG risks and opportunities’, now that many have become accustomed to climate-change reporting.
The Pensions Ombudsman directed the independent corporate trustee of a small self-administered scheme (SSAS) to meet 80% of the loss arising from an injudicious investment, which its fellow trustee (and sole scheme member) wanted to make.
His Majesty’s Revenue and Customs (HMRC) published a February edition of its Lifetime Allowance Guidance Newsletter. It responds to frequently asked questions on lump sums, reporting requirements, the overseas transfer allowance, and transitional matters. There is also some clarification of points about transitional tax-free amount certificates, member statements, and pension commencement excess lump sums (PCELSs).
Pension Schemes Newsletter (PSN) 156 confirmed that the Finance Bill 2023/24 had completed its passage through Parliament (it subsequently received Royal Assent), and that the (many) necessary amendments to its lifetime-allowance-abolition provisions will be achieved by secondary legislation (regulations). Another Lifetime Allowance Guidance Newsletter was expected within the next fortnight.
The Department for Work and Pensions (DWP) has established a small pots delivery group consisting of pension industry, consumer group, and government representatives. The group will provide recommendations on the design and implementation of the ‘multiple default consolidators’ approach for small, deferred, Defined Contribution (DC) pension pots.
The Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) Order 2024 (SI 2024 No. 101) set the ceiling on the amount that the PPF can try to raise via the levies for the year commencing 01/04/2024 at—drumroll, please—a shade under £1.35 billion.
Regulations that come into force on 11 March 2024 will make operating a pensions dashboard a regulated activity. Providing pensions dashboard services without authorization from the Financial Conduct Authority (FCA) will be an offence.
This communication has been compiled by Hymans Robertson LLP, and is based upon their understanding of legislation and events as at the date of publication. It is designed to be a general information summary and may be subject to change. It is not a definitive analysis of the subject covered or specific to the circumstances of any particular employer, pension scheme or individual. The information contained is not intended to constitute advice, and should not be considered a substitute for specific advice in relation to individual circumstances. Where the subject of this document involves legal issues you may wish to take legal advice. Hymans Robertson LLP accepts no liability for errors or omissions or reliance on any statement or opinion.
Download our publication to learn more
Opens in new window Download reportWe pride ourselves on being thought leaders and are constantly discussing the many issues facing and shaping up our industry. Sign up to find our current thinking on topical issues.
Opens in new window Subscribe
