- Pensions minister outlines future plans
- ECJ supports UK court in bankruptcy pension protection case
- House of Commons rejects Lords’ triple lock amendment
- PASA launches ongoing data management and controls guidance
Pensions minister outlines future plans
Pensions minister Guy Opperman appeared before the Work and Pensions Committee on 8 November 2021 (alongside John Glen, Economic Secretary to the Treasury), where amongst other things he outlined the timeframe for some of his Department’s future plans and those of the Pensions Regulator. These include the following:
- CDC schemes – from Summer 2022 Royal Mail should be able to apply to the Pensions Regulator for authorisation of their proposed CDC scheme (see Pensions Bulletin 2021/40). However, this timetable will depend upon the settling of DWP regulations, scheduled for early 2022, and the Regulator issuing its Code of Practice – pencilled in for May 2022 (after a Spring 2022 consultation). The DWP is also developing regulations for multi-employer CDC schemes, but there is some doubt as to when these will be ready – possibly not until the end of 2022. There is no timescale at present for decumulation-only CDCs
- DC decumulation – at some point in 2022, possibly in April, the DWP intends to issue a call for evidence on the potential for trust-based schemes to have investment pathways in place (similar to contract-based schemes) as part of a wider investigation into what members and schemes feel that they want in this territory
Comment
The DWP’s proposed call for evidence on DC decumulation within trust-based schemes is new, but long overdue (and needed given the FCA’s implementation of investment pathways in the contract space). The DWP initiative follows the Pensions and Lifetime Savings Association’s own proposals in this area (see Pensions Bulletin 2020/42). We look forward to seeing what the DWP has to say.
ECJ supports UK court in bankruptcy pension protection case
On 23 January 2020 the High Court provisionally ruled that UK pensions law had to be read so as to deliver the same level of bankruptcy protection in relation to a pension within an Irish-established scheme as that which would be provided had the scheme been UK-registered (see Pensions Bulletin 2020/04). This followed the individual concerned, who came to live and work in the UK after making a substantial contribution to an Irish pension scheme, being made bankrupt in the UK. The reason for the limited protection under UK law is that the Irish scheme was not a UK-registered pension scheme.
The ruling was provisional as it depended upon a referral to the European Court of Justice – that was made before the Brexit transition period ended on 31 December 2020.
The ECJ has now delivered a supportive ruling, finding that if the UK law had been read narrowly it would, in principle, constitute an illegal restriction on the freedom of establishment set out in Article 49 of the Treaty on the Functioning of the European Union. However, the restriction could be justified if it furthered an overriding reason relating to the public interest, was appropriate to ensure the objective it pursued was achieved, and did not go beyond what was necessary to achieve that objective. The ECJ ruled that it was for the UK court to ascertain whether the restriction in this case fell into this camp.
Comment
An unsurprising result and good news for the individual concerned. However, as the UK finally left the EU nearly a year ago now, other individuals in similar situations may not be so fortunate.
House of Commons rejects Lords’ triple lock amendment
As expected, the House of Commons has on Monday overturned the amendment put through by the House of Lords to the Social Security (Up-rating of Benefits) Bill at Report stage (see Pensions Bulletin 2021/47) that would have resulted in a higher increase in the state pension next April than the Government had proposed.
Speaking in the debate, pensions minister Guy Opperman said that Office for National Statistics’ experts had investigated whether it was possible to produce a single robust figure for underlying earnings growth that stripped out impacts from the pandemic, and had concluded that it was not possible.
The motion that the House of Commons disagrees with the Lords’ amendment was carried by 300 to 229 votes. The Bill returned to the House of Lords on Tuesday where the Commons disagreement was accepted, and with Royal Assent then scheduled for Wednesday, the one-year double lock of the higher of 2.5% and the increase in the CPI now passes into law.
Comment
So, the debate around the triple lock and intergenerational fairness continues and is likely only to intensify in light of soaring UK inflation rates – yesterday announced to be at a ten year high with the CPI having risen by 4.2% in the 12 months to October 2021.
PASA launches ongoing data management and controls guidance
Following on from the data management plan guidance that it published in March (see Pensions Bulletin 2021/13) the Pensions Administration Standards Association has now launched new guidance which considers the ongoing data management and controls of pension scheme records.
The guidance recognises that data only remains accurate for a finite period, becoming obsolete if not properly maintained, and looks to support administrators in deciding what data controls to set around both new and existing data, benchmarking and testing.
Comment
Maintaining good quality data is of course essential for the efficient operation of a pension scheme – and its importance is only likely to increase as the pensions dashboard project becomes a reality. This guidance should provide support to pension schemes in doing this.
