Current Issues June 2019
05 Jun 2019 - Estimated reading time: 8 minutes
Excerpts from this month's articles (to read more please download our latest Current Issues using the link below):
Revising the DB funding Code
The Pensions Regulator has announced some details of the forthcoming revision of Code of Practice No. 3: Funding Defined Benefits. As anticipated, the aim of the exercise will be to clarify the Regulator’s expectations, particularly by encouraging trustees to adopt a long-term outlook. The Regulator intends to put forward options for the revised funding framework before re-drafting the Code. It will conduct public consultations at both stages, with the first phase pencilled in for the summer of 2019.
The Regulator, reviewed
A review of the operations of the Pensions Regulator, conducted for the Department for Work and Pensions (DWP), is generally complimentary, but has made recommendations for improvement. The most notable suggestion is that the DWP should consider endowing the Regulator with some limited rule-making powers.
Opinion puts PPF compensation levels in doubt
An Advocate General of the European Court of Justice has urged the Court to reconsider the benchmark that it has developed for the extent of member states' obligation to safeguard employee pension rights in employer insolvency cases. If the ECJ accepts his opinion it could have consequences for the UK’s Pension Protection Fund (PPF) and its levy payers.
Ombudsman responds to High Court rebuff
The Pensions Ombudsman has published a factsheet explaining why he believes that he is, contrary to a recent High Court judgment, a ‘competent court’. The issue is relevant to the question of whether trustees can offset past overpayments against future benefit instalments without judicial approval, in some cases.
Re-writing history impermissibly
The Court of Appeal has overturned a ruling that improperly introduced pension increases were retrospectively validated by a subsequent trust deed and rules. It was impossible to deduce from the very unusual circumstances of the case any intention on the part of the trustees to exercise the powers that were retrospectively conferred on them.
Use of new cost-transparency templates 'strongly encouraged'
The Cost Transparency Initiative has (via the Pension and Lifetime Savings Association, one of the participating organizations) published templates and guidance for asset managers and other suppliers to use to report costs and charges. The standardized templates are intended to help trustees compare different suppliers’ costs and obtain the best value for their investments.
HMRC newsletters May 2019
In May 2019, Her Majesty’s Revenue and Customs (HMRC) published the 45th edition of its Countdown Bulletin series, dedicated to the abolition of salary-related contracting out. It also issued Pension Schemes Newsletter 110.