DB White Paper delayed?
That seems to be the clear implication from last week’s debate in Parliament on the Plumbers’ Pension Scheme. In contributing to the debate about this industry-wide DB scheme, Guy Opperman (the Parliamentary Under-Secretary of State for Work and Pensions) said that “The White Paper will be delivered at some stage this spring”. He went on to acknowledge the elasticity of this concept (widely held in Government circles to be between 21 March and 21 June), before giving an assurance that the White Paper “will certainly be delivered before the summer period”. Until this statement it had been widely assumed that the White Paper would be published in February (see Pensions Bulletin 2017/44).
The minister also mentioned in the debate that, as part of the White Paper, further work is being done on whether consolidation could provide a long-term solution for schemes currently unable to afford a full buyout.
As to the results of the consultation on the DWP’s proposed “deferred debt arrangement” (see Pensions Bulletin 2017/18), which will be of particular interest to the Plumbers’ Pension Scheme, Guy Opperman said that the DWP is aiming to introduce these regulations in April. It seems that the lobbying by some to remove the funding test from this form of employer debt management (and potentially others) has failed, as has the suggestion that the employer debt potentially faced by a departing employer should not take into account debts arising from previously departed employers (ie in respect of the so-called orphan liabilities).
In a separate development Jack Dromey MP has been appointed as Labour’s Shadow Minister for Pensions, replacing Alex Cunningham who resigned in early January.
Comment
We are not surprised that the minister is resetting expectations as to when we might see the White Paper, but even when it is published it will only be a staging post given that we cannot expect to see any legislation introduced until 2020.
Dominic Chappell not a credible witness
So held District Judge Ashworth in Brighton Magistrates’ Court last week when finding the former owner of BHS guilty on all three counts of neglecting or refusing, without reasonable excuse, to provide information or documents to the Pensions Regulator, in relation to its enquiries into the sale and collapse of BHS.
The judgment is of wider interest as it shows the tight timescales that the Regulator can impose when making use of its wide-ranging “section 72” information provision powers.
In this particular case, Mr Chappell was given one week to provide the information first requested, two weeks on what was essentially a repeat request and two weeks when being asked to provide information on an alleged unauthorised disclosure of restricted information from the Warning Notice issued on 2 November 2016 of the Regulator’s intended action against Mr Chappell.
The Judge concluded that Mr Chappell refused to reply to all three notices, stalling for time in relation to the first two, and did not provide any reliable evidence to the Court to substantiate any of the reasons he said provided an excuse.
Dominic Chappell is due to be sentenced this Friday and the offences he has been found guilty of carry unlimited fines for each count.
The Pensions Regulator has noted this judgment and said that its separate anti-avoidance action against Mr Chappell in respect of the BHS pension schemes is continuing.
PPF levy ceiling and compensation cap rise in line with average earnings
The ceiling that the estimated overall pension protection levy cannot rise above has been increased by 1.7% whilst the compensation cap has increased by 1.3%. This is the substance of an Order made by the DWP this week.
The Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling and Compensation Cap) Order 2018 (SI 2018/39) provides that the ceiling for the 2018/19 pension protection levy will be £1,024,372,330. The ceiling has increased in line with the general level of earnings – by reference to the year ending July 2017.
More importantly, the same Order also provides that the cap on PPF compensation (before taking account of service in excess of 20 years) will rise to £39,006.18 from 1 April 2018. The increase also follows that of the general level of earnings – but is by reference to the year ending April 2017.
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.
