Pensions: what's new this week - 21 November 2022
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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: Autumn Statement; Regulators warn of increased scams risk; Dashboards staging timeline confirmed; Ombudsman factsheet: determinations.
- Autumn Statement
- Regulators warn of increased scams risk
- Dashboards staging timeline confirmed
- Ombudsman factsheet: determinations
The Chancellor has delivered his Autumn Statement, with no significant changes for pensions. Contrary to speculation, the freeze on the Lifetime Allowance has not been extended – this remains frozen at its 2020-21 level up to and including 2025-26. No changes were announced to the annual allowance, tapered annual allowance or money purchase annual allowance.
The Chancellor announced that the triple lock on the State pension (ensuring increases in line with the highest of CPI, average wage increases and 2.5%) will be maintained, but the commentary on the review of the State Pension Age (SPA) is possibly of greater significance. A review of the existing timetable to increase the SPA over the next 25 years is currently ongoing and the Statement included an update that this will be published in early 2023. The supporting papers state that the review covers ‘whether the existing timetable remains appropriate’ (or, for example, should be speeded up) and that it ‘will need to carefully balance important factors, including fiscal sustainability, the economic context, the latest life expectancy data and fairness both to pensioners and taxpayers.’
The Pensions Regulator (TPR), Financial Conduct Authority (FCA) and the Money and Pensions Service (MaPS) have issued a press release warning of an increased risk of scams due to current economic uncertainty. The organisations have not yet seen evidence of higher incidences of scams, but are concerned that fears over the economy, such as recent extreme movements in gilt yields, may prompt savers to incorrectly decide that there is a risk to their retirement pots and make rushed decisions about their finances. Concerns around cost of living may also lead savers to look at ways to use pension funds to shore up their finances. These areas of uncertainty could leave savers more open to scam tactics.
Trustees are asked to follow best practice in protecting savers, including warning them of the heightened risk of pension and investment scams in times of uncertainty and highlighting the common signs of a scam (which are outlined in the press release). The press release gives steps savers should take to protect themselves against scams, such as seeking advice from MoneyHelper and getting information on spotting scams and checking the legitimacy of a firm through the FCA’s ScamSmart website. It also warns against ‘recovery room’ scams or secondary scamming, which sees fraudsters approach people who have already been scammed and offer to help them get their money back in return for a fee.
The Pensions Dashboards Regulations 2022 have now gained parliamentary approval. These regulations set out the requirements for dashboards and for the schemes interacting with them, and in particular lay out the staging timetable within which occupational pension schemes must connect to the dashboards ecosystem.
The Pensions Dashboards Programme has produced an at-a-glance guide to the staging timeline. Large master trusts and personal pension providers must connect by the end of August 2023, large money purchase schemes used for auto-enrolment between the end of September 2023 and February 2024; and large non-money purchase schemes between the end of November 2023 and September 2024. More specific deadlines are set out in Schedule 2 of the regulations.
The Pensions Ombudsman has published an updated factsheet on what happens when they issue a determination. The factsheet covers anonymisation of determinations; parties’ duties of confidentiality in relation to information received as part of the complaint process; compliance with and enforcement of determinations; and appealing decisions (crucially, appeals must be lodged within 28 days).