Collective DC to feature in new Pensions Bill
The Pensions Minister, Steve Webb, in a briefing to the Times has stated that there will be a 2014/15 Pensions Bill to be announced in the 2014 Queen’s Speech (due in the Spring, date yet to be announced) and that the centrepiece of the Bill will be the legal framework for “collective defined contribution” pension schemes (see Pensions Bulletin 2013/47).
Comment
Collective DC, which divides opinion, is only one of the options canvassed by the Government in its defined ambition consultation. We still await a full response from the Government on this initiative.
It is interesting to learn that there will be another Pensions Bill in this parliament. Pensions may continue to be a hot topic, or political football depending on your point of view, all the way up to the general election in May next year.
Box Clever – Target companies lose at the Upper Tribunal
In the latest instalment of the litigation around the Pensions Regulator’s issuance of Financial Support Directions (FSDs) against various ITV companies (see Pensions Bulletin 2012/05) the Upper Tribunal in a long and detailed piece of administrative law, has dismissed an attempt by the target companies to throw out the FSDs.
Comment
This looks like it will run and run and it seems likely that the High Court decision will be appealed now that this procedural route for the target companies has failed. It does seem as though the courts are disinclined to throw out an FSD on process grounds.
Pensions Regulator publishes DC trust data analysis
The Pensions Regulator has published a new edition of DC trust: a presentation of scheme return data, a snapshot of the current landscape of occupational trust-based defined contribution (DC) pension provision in the UK.
DC trust is an analysis of the information that occupational trust-based DC schemes are required under legislation to provide to the Regulator. The data comes from information supplied via the scheme registration and scheme return processes and was extracted as at 31 December 2013.
This year’s release covers around 40,000 DC schemes and includes data such as memberships and assets spanning the past five years - 2009 to 2013 (all figures as of 31 December in the relevant year). The figures do not yet reflect the total growth in DC memberships resulting from automatic enrolment - due to the staggered dates that schemes complete their scheme returns to the Regulator, although some of the growth is feeding through.
Key findings include:
- There are £30 billion of assets in DC schemes with 12 or more members (excluding hybrid schemes with DC members)
- The number of DC memberships has increased by 14% over the last year, from 2.2 million to 2.6 million
- The number of DC master trust schemes with 12 or more members has increased by 11% (from 44 to 49) and the membership of such schemes has increased by 50% (from 250,000 to 380,000 members)
- DC memberships now account for 30% of workplace pensions memberships – up from 27% last year
- The proportion of members aged 50 or above has remained stable at 24%.
- The average size of pension transfers is £30,000
- The average pot size at retirement is £25,000
Government launches consultation on the future of civil partnerships
The Department for Culture, Media and Sport (DCMS) has launched a consultation on the future of the civil partnership, prompted by the enactment of legislation which will make same sex marriages possible from 29 March 2014 (see Pensions Bulletin 2013/52).
The DCMS is, in any event, aiming to provide for couples to be able to convert their civil partnerships into marriages before the end of 2014.
The DCMS has also now made the Marriage (Same Sex Couples) Act 2013 (Consequential Provisions) Order 2014 (SI 2014/107) which amends existing primary and secondary legislation, including pensions legislation, to take account of the coming into force of the Marriage (Same Sex Couples) Act 2013, as well as in consequence of the Civil Partnership Act 2004.
The Social Security (Graduated Retirement Benefit) (Married Same Sex Couples) Regulations 2014 (SI 2014/76) do much the same for those still entitled to state Graduated Retirement Benefit.
Comment
The statutory instruments are i-dotting and t-crossing so that references to spouses post same sex marriage are consistent across the statute book, from the London Cab Order 1934 to the Merchant Seaman (Maintenance of Seaman’s Dependants) Regulations 1972. All well and good no doubt.
What is disappointing from the pensions perspective is that one of the few remaining instances of actual discrimination against same sex couples is not addressed – indeed is explicitly out of the scope – of the consultation. Non-contracted out survivors’ benefits for civil partners and, potentially, same sex spouses can be limited to service after 5 December 2005 (see Pensions Bulletin 2013/24). Pension trustees would have hoped to see some resolution to this issue by now.
Automatic enrolment: new forecast and research show the challenge ahead
The Pensions Regulator has updated its forecast of the number of employers due to become subject to auto-enrolment duties over the next four years.
The Regulator now estimates around 30,000 medium-sized employers will reach their “staging dates” between April and the end of the year.
The numbers show a significant increase to the volumes of employers who have staged previously. At the start of the year, a total of 5,431 employers had completed a declaration of compliance, by registering with the Regulator that they had met their duties.
This Pensions Bulletin does not constitute advice, nor should it be taken as an authoritative statement of the law. For further help, please contact David Everett at our London office or the partner who normally advises you.
