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Pensions update: New consumer guide; SIPP; Pensions transfers; Compliance; Trustee and Support Services Panel

Technical article

Publication date:

02 June 2020

Last updated:

02 June 2020

Author(s):

Technical Connection

Pensions update from 14 May 2020 to 27 May 2020

Pensions

 

 

 

Pension bodies produce new consumer guide to reassure savers

(AF3, FA2, JO5, RO4, RO8)

The Pension Protection Fund has worked with other key pension bodies, including The Pensions Regulator, the Department of Work and Pensions, the Financial Services Compensation Scheme and Money and Pensions Services to create a guide for pension savers.

The guide outlines all the protections that are in place to protect pension savers. The guide has been produced as a result of an increase in the number of enquiries from concerned pension savers seeking guidance during the COVID-19 pandemic.

Even before the COVID-19 pandemic, YouGov research found that 73% of savers were worried about the security of their pensions and industry bodies expect these concerns will have increased further by the current situation.

The guide explains how the pension bodies work together to support and protect savers. The guide includes information on how to avoid scams and how pension plans are protected.

The guide is available here.  

Pension Schemes Newsletter 120

(AF3, FA2, JO5, RO4, RO8)

HMRC Pension Schemes Newsletter 120 covers the following:

  • further temporary changes to pension processes as a result of coronavirus (COVID-19) in relating to applying for NI numbers and submitting pension scheme returns
  • contacting HMRCs Pension Scheme Services – a reminder to refer to the Pensions Tax Manual first before contacting them about tax questions
  • relief at source – a reminder that the deadline for submitting the 2019 to 2020 annual return of information is 5 July 2020.

High Court dismisses claims against SIPP provider in landmark ruling

(AF3, FA2, JO5, RO4, RO8)

The High Court has delivered its judgment in the landmark case of Adams v Carey Pensions, dismissing the claim made against the self-invested personal pension (SIPP) provider on all grounds. The case, which was originally heard in March 2018, related to a claim made by Mr Adams against Carey Pensions for the loss of value of an investment held within a SIPP. The long-awaited outcome clarifies the degree of due diligence that is expected from SIPP providers in agreeing investments, particularly with regard to the restrictions of execution-only instructions, conveying implications for the rest of the industry. Christine Hallett, Managing Director of Carey Pensions, commented: “It is a judgment that has been long awaited by the SIPP industry and consumers alike, and gives clarity to what is expected of a SIPP provider under English law and the FCA Conduct of Business Principles when acting upon the instructions of a client.” This is a link to an article from Reynolds Porter Chamberlain LLP explaining the case, as the official court judgement has not yet been published.

TPR urges trustees to prioritise pension transfers from DC schemes

(AF3, FA2, JO5, RO4, RO8)

In updated guidance, The Pensions Regulator (TPR) reiterated to trustees how switches between Defined Contribution (DC) schemes are a “core financial transaction” and frequently used by savers to access their pension funds so they must remain a priority despite the outbreak of coronavirus.

Previously published guidance detailed how trustees of Defined Benefit (DB) schemes may opt to delay new member requests for transfer quotations by up to a maximum of three months, but TPR has confirmed that this isn’t the case for switches between DC schemes as the valuation of benefits is far less complicated.

It is important for trustees to process switches as soon as possible, because if member’s pension switches are delayed, and their investments fall in value during that crucial period, then the member’s cash equivalent transfer value will be lower. Trustees must still ensure that they carry out the required due diligence prior to any switches.

TPR also reminds trustees that they should be monitoring all pension switching activity and remain particularly alert and wary of potential scams, as fraudulent activity has increased significantly throughout the COVID-19 crisis.

TPR’s executive director of policy, David Fairs, said:

The COVID-19 pandemic has created unprecedented challenges for pension schemes and their members. That’s why we’ve been constantly reviewing and updating our guidance to support trustees and protect savers.

Our latest guidance should help trustees of DC schemes prioritise what’s most important – such as ensuring DC to DC transfers are completed in a reasonable time, so savers don’t lose out."

TPR publishes automatic enrolment declaration of compliance report

(AF3, FA2, JO5, RO4, RO8)

The Pensions Regulator (TPR) has published its Automatic Enrolment Declaration of Compliance Report to 30 April 2020. This sets out information based on data submitted by employers. According to the report, between July 2012 and the end of April 2020, 1,665,610 employers confirmed that they had met their automatic enrolment duties. The report also states that 10,285,000 eligible jobholders were automatically enrolled into an automatic enrolment pension scheme during the same period.

PPF establishes new Trustee and Support Services Panel

(AF3, FA2, JO5, RO4, RO8)

The Pension protection Fund (PPF) has announced in a Press Release, the introduction of its new Trustee and Support Services Panel, which will provide support to trustees of schemes whose sponsoring employer is in the stressed or distressed stage of business recovery or is expected to enter a PPF assessment period. A total of 11 specialist companies will give advice on a range of issues, including covenants, restructuring, contingency planning and moral hazard. Malcolm Weir, PPF’s Director of Restructuring and Insolvency, commented: “We believe it is important that trustees have the expertise needed to protect schemes’ interests and maximise the likelihood of delivering the best outcome for the scheme and the PPF. We encourage scheme trustees to recognise their knowledge gaps and to appoint a panel trustee and/or restructuring and insolvency adviser to support them with specialist advice as early as possible.”

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.

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