Regulator publishes new tools to assist DC trustees in producing governance statements
The Pensions Regulator has produced a standardised governance statement and assessment template which trustees of defined contribution (DC) pension schemes can utilise to produce a “governance statement” to demonstrate that their scheme possesses the expected quality features under the DC code of practice launched last November (see Pensions Bulletin 2013/49).
The Regulator expects the governance statement to be easily available to members and employers – for example, by publishing it in the scheme’s annual report and accounts, or on the scheme’s website – and to the Regulator itself upon request.
The Regulator says that the governance statement should be used to:
- Confirm that the scheme complies with the requirements of the Regulator’s DC code of practice, guidance and in particular that it exhibits the quality features
- Explain where the scheme has adopted a different approach where a quality feature is absent or partly in place; and
- Set out what action the trustees intend to take to correct the position where a feature is absent or improve an existing feature
Comment
Whilst DC trustees may wish to produce such a governance statement and they might find the assessment template of assistance, there appears to be no explicit requirement in pensions legislation compelling the production of such statements or their disclosure.
Employer override power will not be extended to individuals employed in certain formerly nationalised industries
Steve Webb has announced that the power to amend schemes to reflect the abolition of contracting out, will not be made available to formerly nationalised industries, now in the private sector, whose ability to change scheme rules was limited by legislation made at the time of their privatisation.
This announcement follows the consultation early last year (see Pensions Bulletin 2013/04) on the possibility of enabling such employers to amend their scheme rules, along with other schemes in the private sector, to take account of the increase in employer national insurance contributions as a result of the ending of contracting out by reducing future service benefits and/or increasing member contributions.
The Government’s response to the consultation has been published and an amendment to the Pensions Bill to this effect is to be considered at Report Stage in the House of Lords.
OFT confirms decision not to refer DC workplace pensions market to the Competition Commission
The Office of Fair Trading (OFT) has formally confirmed that it will not be referring the DC workplace pensions market to the Competition Commission despite its concerns that the market does not work well for consumers.
In September 2013, the OFT reported that it had serious misgivings about the competitiveness of the marketplace (see Pensions Bulletin 2013/39), but the steps already being put in place by stakeholders, such as the Department for Work and Pensions’ consultation on charges (see Pensions Bulletin 2013/45), has led it to believe that although there was a case for referral to the Competition Commission, the “remedial” steps are likely to have enough of an impact that such referral is not necessary.
Scots hint at deferring state pension age rise
The Scottish Government has cited recent research as supporting its argument for disengaging from Westminster’s timetable for state pension age increases should this year’s referendum result in a vote for independence.
The latest report from the National Institute of Economic Social Research found that Scotland is disadvantaged in having the same state pension age as the rest of the UK by virtue of its lower life expectancy.
The Scottish Government published its plans for pensions post-independence last autumn (see Pensions Bulletin 2013/40) which included a pledge to establish an independent commission to consider the appropriate pace of further change to the retirement age beyond 66, which would report to the Scottish Parliament within the first two years of independence.
Individual Protection 2014 guidance updated
HM Revenue & Customs has updated its draft guidance note on Individual Protection 2014 (IP2014). The revisions seem minor, mostly typographical corrections and naming conventions – but helpfully the guidance is now easier to find, direct from a link on the HMRC web pages intended to explain the Lifetime Allowance to the man in the street.
Comment
The updated guidance has been issued just after the window closed for comments on the draft legislation setting up Individual Protection 2014 (for our more detailed comments see Pensions Bulletin 2013/51). With only seven weeks to go before the Lifetime Allowance reduces, there is much for some individuals to think about and choices to make.
Labour pledges 0.5% cap on pension charges
Following last month’s announcement that any cap on pension charges would not happen before April 2015 (see also Pensions Bulletin 2014/03), Labour has pledged to introduce a 0.5% cap within the lifetime of a Parliament if it wins the general election that May.
It has also said that it intends to introduce a requirement for annuitants to be referred to a broker for impartial advice.
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.
