Rule change without ‘section 37 certificate’ declared void

The High Court in England and Wales has said that amendments made in 1999 to the rules of a contracted-out salaryrelated scheme were invalid, because the changes were introduced without the actuarial confirmation that was required at the time. The same issue may affect other schemes that altered the terms of benefit accrual in the period from 6 April 1997 to 5 April 2016, and may find that the change was ineffective, and their liabilities not what they had assumed.

Inappropriate independent advice?

The Department for Work and Pensions (DWP) has completed a post-implementation review of the requirement for authorized financial advice for certain types of benefit transfer. There's the prospect of a lighter-touch approach for less risky transactions.

Government to consider tweaks to troublesome transfer rules

The DWP has carried out a scheduled review of the additional conditions for statutory transfers that it introduced in 2021. It concludes that the original policy intention remains appropriate, but acknowledges the industry's concerns about some of the transfer-scam 'warning flags'. It will work with the pensions industry and the Pensions Regulator to consider if changes could be made without undermining the policy.

Commons Committee pushes for reassessment of funding reforms

The House of Commons Work and Pensions Committee published a report on its inquiry into Defined benefit pensions with Liability Driven Investments (LDI). The (almost literally) show-stopping recommendation is that the Department for Work and Pensions (DWP) and Pensions Regulator ‘should halt their existing plans for a new funding regime, at least until they've produced a full impact assessment for the proposals, including the impact on financial stability and on open DB schemes.’

Public-sector pensions update

A whistle-stop tour of developments affecting public-service pensions provision in June 2023.

DB Annual Funding Statement Analysis

The Pensions Regulator has published some analysis of the data behind its 2023 Annual Funding Statement, which focused on private-sector defined benefit schemes with valuation dates between 22 September 2022 and 21 September 2023. The results suggest that this sample of schemes was— generally—better funded than at the valuation dates three years previously, primarily because of significantly increased gilt yields.

Possible extension to PPF

The Pension Protection Fund (PPF) has responded to reports that the Government is considering extending its current remit—providing a safeguard for members of defined benefit schemes where the sponsoring employer fails—to allow it to act as a consolidator scheme for smaller, poorly performing defined benefit schemes.

HMRC newsletters: June 2023

Highlights from HMRC's Pensions Schemes Newsletter 151. 

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