Pensions UK: What's new this week - 24 May 2021
24 May 2021
Welcome to your weekly update from the Allen & Overy Pensions team, covering all the latest legal and regulatory developments in the world of occupational pensions.
This week we cover topics including: a consultation on simpler annual statements; a call for input on the pensions consumer journey; and the Pensions Regulator’s Corporate Plan for 2021-24.
- Government consults on simpler annual statement
- TPR and FCA call for input on pensions consumer journey
- TPR publishes Corporate Plan
- HMRC publishes Trust Registration Service manual
- Latest Pensions Academy Online recordings now available
The government has set out its plans for rolling out simpler annual statements, with a new consultation on proposed regulations and statutory guidance. The consultation on the detail of the new regime follows an announcement last year: read more. The proposals are relevant where money purchase benefits are provided by a scheme that is a qualifying scheme for auto-enrolment.
The proposals would be implemented via changes to the existing requirement in the Disclosure Regulations to issue annual statements for money purchase benefits, and would apply in respect of members of relevant schemes who are in the accumulation phase, but not members ‘in receipt of benefits’ (we will be seeking clarification about how this is intended to apply where members have multiple arrangements or have taken a cash lump sum withdrawal, but remain active contributors). Where the new requirements apply, trustees would have to provide annual statements that do not exceed a maximum of one double-sided sheet of A4 paper when printed. However, where a member has asked for the information to be supplied in an alternative format, the trustees may do so if they are reasonably satisfied this is necessary to comply with duties under the Equality Act 2010. The regulations are not intended to prevent trustees providing supplementary information to the statement where they believe it is helpful to members, but that information must be provided in a separate document to the statement itself, either in physical form or signposting to online content, and the statement must be the first substantive document in any pack of material. The draft statutory guidance also discusses types of supplementary information and whether this could be included in the two-page statement (eg additional information about costs and charges), provided that the page limit is not exceeded, or if signposting should be used.
The changes are expected to come into effect on 6 April 2022 (where the annual statement has already been provided to a member before 6 April 2022, there will be no obligation to re-issue that statement). The consultation closes on 29 June 2021.
In related news, the government has also established a working group to investigate the concept of a ‘statement season’ (whereby schemes would be required to send statements during a certain period in the year), and whether this could improve public conversations about retirement saving.
The Pensions Regulator (TPR) and the Financial Conduct Authority have launched a call for input, seeking feedback on how consumers make decisions about their pension at key points throughout their working lives. They are aiming to gather views and data to help inform future policymaking, and have said that feedback will be used to consider and target future regulatory interventions in areas that most benefit consumers.
The call for input closes on 30 June 2021.
TPR has published its Corporate Plan 2021-24, which sets out TPR’s key priorities for the next three years, and the steps that it will take as part of implementing the strategic priorities in its longer-term Corporate Strategy.
This includes work on the implementation of the Pension Schemes Act 2021 (with the new criminal and civil penalties and contribution notice powers starting from October 2021 and changes to the notifiable events regime in 2022), the effect of the Covid-19 pandemic, pension scams, cyber security and value for money. A second consultation on the DB funding code will take place in the latter part of 2021-22, as well as guidance on TPR’s expectations around climate change and a regulatory approach and enforcement regime relating to the new requirements in this area. It also notes that TPR will continue to keep its interim regime on superfunds under review, and that it expects the legislative framework for superfunds to be introduced from 2022-23.
HMRC has published a manual on the Trust Registration Service (TRS), which is a register of the beneficial ownership of trusts. The manual includes guidance on occupational pension schemes and trusts of life policies.
Under the relevant regulations, trust-based pension schemes registered under Part 4 of the Finance Act 2004 and life policies paying out only on death, terminal/critical illness or permanent disablement (or to meet the cost of healthcare services) are exempt from the requirement to register on the TRS.
The manual notes that where trusts holding sums or assets of a pension scheme are awaiting approval of registration under the 2004 Act, TRS registration is not required in the interim, provided the trustees have a genuine expectation that Finance Act 2004 registration will occur: read more.
Recordings of our May 2021 Pensions Academy Online webinars are now available online: click here to watch.
As a reminder, the programme covered: TPR’s draft single code of practice; a discussion with our investment experts on sustainability-related issues; and a round-up of other recent and future legal developments.
Recordings of past Pensions Academy Online webinars can be found here.