Current Issues August 2019
01 Aug 2019 - Estimated reading time: 15 minutes
Excerpts from this month's articles (to read more, please download our latest Current Issues):
Regulator consults on the ‘Future of Trusteeship & Governance’
A new consultation paper from the Pensions Regulator seeks views about the Future of Trusteeship and Governance. It asks about ways to raise levels of trustee knowledge and understanding, the ideal composition of trustee boards, and how to remove barriers to consolidation for defined contribution schemes that cannot reach the required standards. Notably, it is the Regulator’s ambition that, following the departure from the scene of those that are unable to improve sufficiently, each scheme will each have at least one professional trustee; but it is leery of the 'sole trustee' model of governance for defined benefit schemes.
Proposals for putting new trustee investment rules into pensions law, plus draft guidance
The Department for Work and Pensions (DWP) is consulting on proposals for placing new requirements for trustee oversight of investment consultancy and fiduciary management services, as imposed recently by the Competition and Markets Authority (CMA), on a statutory footing. The Pensions Regulator has published draft guidance for trustees on how they should meet their obligations in this area.
Regulator expects review will lead to a single Code of Practice
The Pensions Regulator has announced that over the next year it will review its fifteen Codes of Practice and expects to combine them to form a single, shorter Code. It intends to make the information ‘quicker to find, use and update, so that trustees and managers of all types of scheme can be more responsive to changes in regulation’.
Supreme Court denies Government’s application for permission to appeal ruling
The Supreme Court has denied the Government’s application for permission to appeal against a ruling that transitional protections made during the reform of the Judicial and Firefighters’ pension schemes are discriminatory. An Employment Tribunal will now decide on the appropriate remedy for the discrimination. In a written statement the Government confirmed that the Court of Appeal’s ruling affects all the main public service pension schemes.
Revised DC investment governance guidance
The Pensions Regulator has revised its Investment Governance guidance for defined contribution (DC) schemes to reflect recent legislative requirements.
Regulator’s DB funding analysis 2019
The Pensions Regulator has published its 2019 Scheme Funding Analysis for defined benefit (DB) and hybrid schemes, covering Tranche 12 schemes (those with valuation dates from 22 September 2016 to 21 September 2017).
Court dismisses appeal against ‘Box Clever’ financial support directions
The Court of Appeal has dismissed, in unequivocal terms, an appeal against the Regulator’s decision to issue financial support directions (FSDs) in the long-running ‘Box Clever’ case. The judgment examines the implications of retrospection (all of the events on which the FSDs were based occurred before FSDs existed), questions about the connections between the scheme employers and the targets of the FSDs, and other matters relevant to the ‘reasonableness’ of the Regulator’s decision.
Pension Charges Bill
A Private Member’s Bill, the Pension Charges Bill 2017-19, has been introduced to Parliament under the ‘Ten Minute Rule’. The Bill would ‘require pension providers to publish standardized information on charges for pension products [and] make provision for a cap on such charges’.
EIOPA’s opinions on governance and risk management of pension funds
The European Insurance and Occupational Pensions Authority (EIOPA) has published documents intended to assist 'National Competent Authorities' (like the UK's Pensions Regulator) oversee various governance-related aspects of the IORP II Directive. They cover matters such as the own-risk assessments that occupational schemes will be expected to conduct, operational risks, and environmental, social and governance (ESG) risks.
Joint statement on climate change
The Pensions Regulator, along with the Financial Conduct Authority, Financial Reporting Council and Prudential Regulation Authority, has published a statement acknowledging that climate change is a major issue and presents far-reaching financial risks to their respective mandates.
The Divorce, Dissolution and Separation Bill
The Divorce, Dissolution and Separation Bill would, assuming it becomes law, introduce changes to the legal processes for obtaining a divorce, dissolving a civil partnership and obtaining a judicial separation. The reforms would remove the incentive under the current system that encourages one spouse or partner to make allegations about the other’s conduct in order to expedite the divorce process.
- ‘Capacity to marry’ condition breached unmarried partner’s human rights
- Administrator should have been aware of pension tax rules
- Same-sex spouses in public sector to have parity with widows
Her Majesty’s Revenue and Customs (HMRC) has published Pension Schemes Newsletter 112 and Countdown Bulletin 47.
Pensions Regulator launches re-enrolment tool
The Pensions Regulator has launched a new tool to assist employers comply with their automatic re-enrolment duties.