Pensions Bulletin 2023/33

• MaPS publishes its 2023/24 Corporate Plan
• Pensions Regulator publishes 2023 scheme funding analysis
• PDP provides update on dashboard project
• McCloud remedy: more tax regulations made

MaPS publishes its 2023/24 Corporate Plan

The Money and Pensions Service (MaPS) has published its Corporate Plan for 2023/24 in which it outlines five priority themes that will help it deliver its core services so that guidance and advice on money, debt and pensions is available however and whenever individuals need it.

In relation to pensions, amongst the things that MaPS intends to deliver in 2023/24 are the following:

• Continue the build of a scalable digital Pensions Wise appointment in preparation for a public launch. Currently, voluntary Pension Wise appointments, for the over 50’s to assist them reach decisions on taking money from DC pots, are either face-to-face or over the telephone
• Complete the reset of the Pensions Dashboards Programme announced in March 2023, and continue work towards connecting pension providers and schemes to the dashboards technical architecture. And continue the delivery of the MaPS MoneyHelper pensions dashboard
• Work with the DWP on the development of the Pensions Safeguarding Service, “using its year of delivery to provide data and insight into customer and industry use of this service”. The Service relates to the appointments with MoneyHelper that those seeking to transfer their benefits to another provider must attend if their transfer has been amber flagged by their current provider and they wish to continue with the transfer. It is not clear from the Plan what enhancements MaPS has in mind for this vital service, but the recent MaPS report on pension scams (see Pensions Bulletin 2023/32) may provide some clues
• Develop holistic money and pensions life event guidance, including later life planning, together with industry partners
• Start work on a new delivery model for all MaPS guidance services

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Pensions Regulator publishes 2023 scheme funding analysis

The Pensions Regulator has published the 2023 update to its annual funding statistics for UK defined benefit and hybrid pension schemes. The update is based on schemes with effective valuation dates between 22 September 2020 and 21 September 2021, known as tranche 16 schemes. The analysis covers over 1,710 valuations.

Key findings include:

• Assets and liabilities grew at approximately equal rates since the previous valuations three years ago, resulting in a relatively unchanged average funding ratio of 93.7% on a technical provisions basis

• The average recovery plan for schemes in deficit was 5.0 years

• The average single effective discount rate was a nominal 1.9% (a -1.56% real rate)

• Nearly 60% of tranche 16 schemes have less than 40% of assets invested in return-seeking asset classes, with just over 15% of those schemes having more than 60% in return-seeking asset classes

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PDP provides update on dashboard project

The Pensions Dashboards Programme has published a short update on the reset of the dashboards project in which (amongst other things) it says that having completed an assessment of the programme challenges “there are no major issues with the central digital architecture that sits at the core of the pensions dashboards ecosystem”.

The update goes on to say that the PDP is currently in planning towards the new connection deadline and it will progress draft standards, develop supporting documentation and the support model for connection, and continue to work with early participants on connection and testing. The PDP will continue to share programme updates, including the publication of its progress update report in the autumn.

There is no news on when we might see the proposed connection guidance.

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McCloud remedy: more tax regulations made

HM Treasury has now made The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No.2) Regulations 2023 (SI 2023/912). These were consulted on in May 2023 (see Pensions Bulletin 2023/21) and deliver further changes to pensions tax rules for public service pension schemes to assist them in dealing with the McCloud remedy reforms. The regulations build on the first set of such regulations that came into force on 6 April 2023 (see Pensions Bulletin 2023/05).

Refinements made to the draft regulations following consultation are further discussed in HMRC’s latest newsletter on the public service remedy. These include provisions to ensure that voluntary contributions are unable to attract tax-free lump sums more than once and clarification of how certain benefits are to be taxed, and how the modified reporting and administration requirements will apply to individuals.

Guidance on the regulations as issued for consultation was published in June 2023 and this is expected to be updated to reflect these latest changes in due course.

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