Pensions Bulletin 2019/34

Parliament prorogued – pensions legislation now in suspense

Parliament’s prorogation on early Tuesday morning means that two Bills with a pensions flavour are now lost and will have to start all over again in the new parliament due to be opened on 14 October. The Bills are as follows:

• The Pension Charges Bill – sponsored by Angela Eagle and which seeks to take current policy interventions further in relation to the charges implicit in DC pension products (see Pensions Bulletin 2019/19)
• The United Kingdom Atomic Energy Authority Pension Transfers (Parliamentary and Health Service Ombudsman Investigation) Bill – sponsored by Ed Vaizey, which enables the Parliamentary and Health Service Ombudsman to investigate “advice” given by the Secretary of State and the Government Actuary relating to transfers of pensions from the United Kingdom Atomic Energy Authority pension scheme to the AEA Technology pension scheme (whose employer subsequently did a pre-pack with the members ending up in the Pension Protection Fund). If this investigation concludes that such advice was not up to an appropriate standard, there could be some form of restitution provided to members

We also understand that the Government-supported Divorce, Dissolution and Separation Bill, which makes important changes to the legal process: for married couples to obtain a divorce, for civil partners to dissolve their civil partnership, or for obtaining a judicial separation (see Pensions Bulletin 2019/24) is also lost. This Bill, which was at report stage in the House of Commons, also made some consequential changes to the pension sharing legislation.

Statutory instruments will also, in effect, come to a halt until at least 14 October – some can be “made”, but they cannot be “laid” until the new Parliamentary session begins.

This year’s prorogation has been deeply controversial. And on Wednesday, the Inner Chamber of the Scottish Court of Session (Scotland’s highest appeal court) ruled that it was unlawful. The case now goes to the Supreme Court in London for its final stage on Tuesday.

Comment

Assuming that prorogation stands, all pensions eyes will now be focussed on the Queen’s Speech to see if the Pensions Bill is announced (and it is being reported that it will be). But even if it is, it could easily be lost if Parliament is subsequently dissolved for a General Election!

Yet another new DWP boss

Thérèse Coffey has been appointed as Secretary of State for Work and Pensions following Amber Rudd’s resignation. This is a substantial step-up for Dr Coffey who was previously Minister of State at the Department for Environment, Food and Rural Affairs.

Comment

We will not be the first to note that this is now the sixth DWP Secretary of State since Iain Duncan-Smith resigned in March 2016. Not one of Dr Coffey’s five predecessors has managed to stay in post for a year.

Pensions Regulator takes action against trustees

Two cases of regulatory action have been made public by the Pensions Regulator.

In the first, three directors of a trustee firm, N W Brown Trustees Ltd, have given undertakings never to act as pension scheme trustees. This follows a Regulator investigation into the trustee firm after being tipped off about a proposed employer-related investment which revealed wider shortcomings in the firm’s fitness to act as a pension trustee.

The undertakings have been given in lieu of the Regulator seeking a prohibition order, but the Regulator reserves the right to take further action if the undertakings are not met or further breaches are identified.

In the second, the Regulator has launched a criminal prosecution against Michael Woolley who is a director and shareholder of Southbank Capital Ltd. It is alleged that Mr Woolley failed to provide information required under a “section 72” notice relating to investments made by Southbank Capital with money and/or assets originating from 16 pension schemes for which PIM Trustees Ltd is the trustee. Mr Woolley is also the sole director and a shareholder of this trustee firm. It is not clear at this stage what the nature of the Regulator’s investigation is that led to the section 72 notices.

Comment

These cases further illustrate the willingness of the Regulator to use the powers at its disposal where it has concerns about schemes not being run properly by professional trustee firms.