Regular round-up of the latest pensions, investments, trusteeship and scheme management news
Current Issues - December 2021
02 Dec 2021 - Estimated reading time: 9 minutes
See excerpts from this month's articles below (to read more, please download our latest Current Issues):
New transfer conditions to tackle scams
In an effort to prevent members from falling victim to scams, new Regulations will prevent trustees or managers of pension schemes from processing statutory transfers unless certain conditions are met. The changes come into effect on 30 November 2021, so scheme administrators have only a little time in which to bring their processes into compliance.
Climate & investment reporting: setting expectations & empowering savers
The Department for Work and Pensions (DWP) proposes to amend the climate-change governance and reporting regulations to require trustees and managers to calculate and disclose a ‘portfolio alignment metric’ setting out the extent to which trustees' investments are aligned with the 'Paris' goal: limiting the increase in the global average temperature to 1.5 ⁰C above pre-industrial levels. It is also consulting on draft guidance, both statutory and non-statutory, concerning implementation statements, and best practice in relation to Statements of Investment Principles (SIPs).
De minimis fund for flat-fee default charges
The Department for Work and Pensions (DWP) has announced the outcome of a consultation exercise about Permitted Charges within Defined Contribution Pension Schemes. It will proceed with plans to introduce a de minimis fund size for flat fees within the charge-capping rules, so as to prevent such fees from reducing the value of a member's funds held in auto-enrolment default investment arrangements to less than £100. Amendment Regulations and non-statutory guidance will be published in time to implement the change from April 2022.
DWP proposes >100% increases in fraud levy rates
The Department for Work and Pensions (DWP) proposes to increase the fraud compensation levy from 75p (30p for defined contribution master trusts) per member to £1.80 (65p for DC master trusts) per member, with effect from the 2022/23 levy year. It says that the increase is required to recover (by 2030/31) the anticipated costs of claims related to scam pension schemes, following a November 2020 High Court judgment.
Treasury closes NMPA change window
The Finance Bill 2021/22 has been published. It includes a provision that would redefine the phrase ‘normal minimum pension age’ (NMPA) in the pensions tax legislation, so that from April 2028 onward it would mean age 57. There has been a significant change to the transitional rules associated with the change.
Statutory minimum revaluation in deferment
The Occupational Pensions (Revaluation) Order 2021 confirms that the minimum statutory revaluation of final-salary deferred pensions for those who reach normal pension age in 2022 will be based on the 3.1 per cent rate of Consumer Prices Index (CPI) inflation over the year to September 2021.
HMRC newsletters: November 2021
Managing Pensions Schemes Service Newsletter - November 2021
Her Majesty’s Revenue and Customs (HMRC) published a November 2021 edition of its Managing Pensions Schemes Service Newsletter.
Pension Schemes Newsletter 135
Pension Schemes Newsletter 135 contains (amongst other things) a call for scheme administrators registered on the Pension Schemes Online service, who are no longer acting for any pension schemes or intending to do so in the future, to contact HMRC so that it can delete the relevant credentials.