General Election today - some pensions actions for tomorrow
The country goes to the polls today to elect a new Parliament in what could be the most consequential General Election since 2010. But whatever the colour of the Administration that will be formed in its immediate aftermath, there is a lot to do to take forward pensions policy, much of which has support across party lines.
The most urgent is a procedural matter and this relates to the new scheme funding regime that has been legislated to come into force for valuation effective dates from 22 September 2024. However, the legislation is only part of the story as the Pensions Regulator needs to publish all of its supporting materials, including its Code of Practice that must be laid before Parliament. We hope to see this happen soon.
Potentially next up for the incoming pensions minister is how to deal with the Virgin Media case on which we report below. Although it could be a little while before the judicial process concludes, there is a clear risk that the upshot could be an unnecessary and costly distraction should DB schemes have to delve into the distant past to check whether what they did then stands up to scrutiny now.
The various so-called Mansion House initiatives ranging across a number of policy areas under the overarching themes of consolidation, delivering better value for pension savers and encouraging investment in UK enterprises, have steadily progressed, but will need to be spurred on by the new Administration with whatever changes it wishes to see. It will likely be some time before we see the fruits of these, with a key event likely to be the first Budget of the new Parliament. The King’s Speech, currently scheduled for 17 July 2024, may also give some indication of pension priorities, if any, for the new Government.
Finally, the various regulatory bodies who have been holding back various initiatives and reporting during the pre-Election period, will shortly be freed once again to let us know what they are up to and what they want of us. Expect a significant uptick in activity from them in the coming weeks beyond the normal pleasantries about their looking forward to working with a new Administration.
Comment
In these past few weeks there have been very little on which to report. Although the summer is traditionally lighter on pensions policy as holidays intervene, we look forward to a return to policy development and delivery which we expect to build in the coming months.
Virgin Media appeal heard
Last week saw the hearing, over two days, of the appeal against the High Court judgment in the Virgin Media case.
This 2023 judgment (see Pensions Bulletin 2023/25) included a ruling that the actuarial confirmation, required when an amendment to scheme rules related to certain contracted out rights, needed to cover both past service and future service such rights. It is being argued before the Court of Appeal that this finding was incorrect and only past service rights fall within the required actuarial confirmation.
It is not being disputed that an amendment made without the required actuarial confirmation will be void. The issue at hand is the scope of this confirmation.
It is unclear when the Court of Appeal will hand down its judgment but it may well not be until the Autumn.
Comment
The Court of Appeal’s decision will be keenly awaited. Should it side with the past service only suggestion many of the concerns expressed in the light of the High Court ruling are likely to fall away. But should it back the High Court there will be calls for the Department for Work and Pensions to intervene.
Signposting the Pensions Ombudsman
The Pensions Ombudsman has published another of his factsheets, this time with some suggested wording that pension schemes can use to signpost their members to the Pensions Ombudsman in different contexts. These include when responding to member complaints and some wording for use on scheme websites.
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.
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