DB & hybrid scheme return - changes to membership guidance

The Pensions Regulator has withdrawn guidance associated with this year's defined benefit (DB) and hybrid scheme return in response to feedback about inconsistencies in its advice about the classification of dependants. It has reverted to the version of the guidance used in previous years to clarify that dependants in receipt of pensions should not be counted as pensioners when answering the 'Scheme membership' question in the 'Scheme details' section of the return.

Sunak’s Spring Statement

The Chancellor of the Exchequer’s Spring Statement (#NotABudget) announced… nothing that was directly pensions-related. The primary threshold for payment of employee National Insurance Contributions will rise to meet (and remain aligned with) the £12,570 income tax personal allowance, with effect from July 2022; and the basic rate of income tax will be reduced (in England, Wales and Northern Ireland, at least) by one percentage point, to 19 per cent, in April 2024. There is also a five-pence-per-litre cut in fuel duty, for the next twelve months.

Temporal limit on age discrimination unlawful

An employment judge has cast doubt on a pensions-law provision that limits the effect of an age-based non-discrimination rule to periods of service since 1 December 2006.

Fraud levy hike enabled

The Department for Work and Pensions (DWP) has, as proposed, cleared the way for a potential 2.4× increase in the fraud compensation levy, which could see it rise to £1.80 per member (a lower cap of £0.65 per member will apply to defined contribution master trusts). Calls for a review have been rejected.

Public Service Pensions and Judicial Offices Act 2022

The Public Service Pensions and Judicial Offices Act 2022, which contains the primary legislation necessary to correct the 'McCloud' discrimination problems in the public service pension schemes, received Royal Assent on 10 March 2022. It also enables changes to the employer cost-cap rules, for the 2020 and subsequent valuations, and allows the Government to take action to prevent local-authority pension managers from (as the Government’s spokesperson put it) ‘pursuing their own foreign policy agendas.’

Dormant assets scheme encroaches on pensions

The Dormant Assets Act 2022 gained Royal Assent on 24 February. It allows (amongst other things) personal pension providers to transfer unclaimed benefits into a special fund that can redistribute them in support of good causes.

Revaluation statutory instruments

Public Sector pensions

The Public Service Pensions Revaluation Order 2022 applies to accruals in the reformed career average (CARE) public-sector schemes. Benefits at the end of the 2021/22 scheme year will be increased at the start of the 2022/23 scheme year by 3.1 per cent, to the extent that the scheme rules refer to changes in prices; and by 4.1 per cent where they look to changes in the general level of earnings.

Section 148 Order

The 'section 148 order' that applies to the revaluation of GMPs during active service, and in some cases for early leavers, has been laid before Parliament and comes into force on 6 April 2022. This year's Order is based on a 4.5 per cent increase in the general level of earnings.