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Pensions: what's new this week - 7 November 2022

Welcome to your weekly update from the Allen & Overy Pensions team, covering all the latest legal and regulatory developments in the world of workplace pensions.

This week we cover topics including: Dashboards: FCA rules for pension providers; HMRC Pension Schemes Newsletter; Tribunal: EU equal treatment principle does not override domestic law post-Brexit.

Dashboards: FCA rules for pension providers

The Financial Conduct Authority (FCA) has published its final rules and guidance on pensions dashboards for FCA-regulated pension providers. This sets out the requirements those providers will need to comply with around connecting to pensions dashboards and processing the necessary data to allow the public to find information on their pension savings. Most providers must implement the rules and be connected to the dashboards digital architecture and ready to process information requests by 31 August 2023 (an extension of two months to the initial proposed deadline of 30 June). Providers that have fewer than 5,000 pots in accumulation and that rely on a third-party integrated service provider (ISP) to achieve compliance can have a later connection deadline of 31 October 2024 if they notify the FCA of their intention to do so by 30 April 2023.

Read the rules.

HMRC Pension Schemes Newsletter

HMRC has published Pension Schemes Newsletter 144, which provides information on using the Managing Pension Schemes service including how to enrol, update your list of schemes and request a refund of credit balances. It also includes a reminder that Accounting for Tax (AFT) returns for any quarter from 1 April 2020 onwards will need to be submitted through the service. If you need to submit a return for the quarter 1 July 2022 to 30 September 2022, this must be done through the Managing Pension Schemes service by the filing deadline of 14 November 2022 to avoid interest and penalties. The Newsletter also gives an update on HMRC’s plans to modernise the relief at source system.

Read the Newsletter.

Tribunal: EU equal treatment principle does not override domestic law post-Brexit

The Secretary of State has been partially successful in appealing an employment tribunal decision which had put into question the validity of the UK’s temporal restriction on age discrimination rules: Secretary of State for Work and Pensions v Mr Beattie and Others.

Linked with the Hampshire and Hughes cases (read more), members of a pension scheme challenged a reduction to their benefits due to them being under normal pension age (NPA) when the scheme entered PPF assessment on the insolvency of its employer. Under UK legislation, benefits accrued before 1 December 2006 are excluded from rules prohibiting age discrimination. This exclusion had been relied on to reduce the claimants’ benefits, which were accrued before that date. Those who had reached NPA would not have been subject to such a reduction. The Employment Tribunal had held that the legislative exclusion was contrary to EU anti-discrimination law and should be disapplied.

On appeal, the judge was asked to consider a number of arguments. She rejected appeals brought on the grounds that the tribunal had erred in applying EU law that could not be directly enforced against a pension scheme trustee. She also disagreed with arguments that the fact that the members had all stopped accruing benefits, had retired and that the scheme had gone into PPF assessment before 2006 meant that they did not have an ongoing right, and so to apply the anti-discrimination rule would be retroactive. Following the rationale in Walker v Innospec, she found that there was an ongoing relationship: payments were being made on an ongoing basis and the claimants were asserting a right to uplift those payments.

However, the Secretary of State’s appeal did succeed in respect of the majority of members who had made claims after the UK ceased to be a member of the EU (the ‘IP completion date’). The Withdrawal Act, which set out provisions on how EU law should be treated after that date, said that it would no longer be open to a court or tribunal to disapply domestic UK law on the basis that it was incompatible with the general principles of EU law. There was an exception where claims were brought before the IP completion date, which meant that two of the claimants did not have their claims overturned.

This decision appears (subject to appeal) to have limited what could otherwise have been a significant change to the UK legal position on discrimination, preventing claims being brought on this basis post-Brexit. It may also influence how the application of EU law is considered in other areas.

Read the case.