TPR crackdown on poor record-keeping
The Pensions Regulator (TPR) is asking the trustee boards of 400 pension schemes to conduct a data review within six months as part of a crackdown on poor record-keeping. These schemes are believed to have failed to review their data in the last three years.
The schemes include defined contribution, defined benefit and public service schemes, and the trustees will be required to report to TPR what proportion of their members they hold accurate common and scheme-specific data for. Those that fail to do so may face action, which could include an improvement notice about their inadequate internal controls. Failure to comply with the notice carries a fine of up to £5,000 for an individual or up to £50,000 in any other case.
A total of 1,200 schemes are being contacted to remind them to carry out data reviews of both common and scheme-specific data every year. Trustees and scheme managers are responsible for ensuring these reviews are completed.
The move comes as TPR tightens its regulatory grip to drive up standards of governance and administration and deliver better outcomes for pension savers. In addition to record-keeping, communications will be sent to more than 1,000 schemes this year about issues such as dividend payments to shareholders and the length of recovery plans.
Without accurate records, schemes cannot process financial transactions promptly and accurately, communicate with their members, check employers are correctly paying contributions, have confidence in the accuracy of scheme valuations or assess whether savers are getting value for money.
Accurate record-keeping will also be vital for the pensions dashboards so that savers can see exactly what pension savings they have and consider whether they need to put more away for later life. Trustees that discover that the data they hold is of poor quality will be expected to draw up improvement plans to rectify the problem.
Ombudsman corporate plan 2019-22
The Pensions Ombudsman (TPO) has published its corporate plan for 2019-22, which outlines its priorities and strategic aims for the next three years. The focus is “ensuring every dispute can be resolved at the earliest point, with no loss of quality”. The Corporate Plan also sets out recommendations from the recent Tailored Review.
High Court dismisses SPA claim
The High Court has ruled that the mechanism used to increase the State Pension Age (SPA) for affected women born in the 1950’s did not directly discriminate against them on grounds of sex, age or both.
The Court dismissed the direct discrimination claim on the grounds that legislation “affects women only, because it was women only who previously enjoyed the advantage which is now being removed” and that it was designed to “equalise a historic asymmetry between men and women and thereby corrects historic direct discrimination against men”. Also, it did not amount to indirect discrimination because the differences in working patterns of men and women are “rooted in traditions and cultural norms” as opposed to being caused by a change to the SPA.
In respect of whether the government had correctly managed expectations by keeping women informed of the proposed changes, the Court decided that the impacted women could have had no legitimate expectation to receive notification or be engaged in prior consultation before the alteration of the SPA as no such promise or representation was ever made.
It remains to be seen whether the claimants will appeal the decision.
On a related note, the House of Commons Library has updated its briefing paper CBP-7405, Increases in the State Pension age for women born in the 1950s, following the judgment.
GMP-E ‘methodology’ guidance published
A sub-committee of the GMP Equalisation Working Group, launched by the Pensions Administration Standards Association (PASA), has published guidance outlining methods that schemes could use to equalise for sex-based inequalities arising from Guaranteed Minimum Pensions (GMPs). Also, the guidance suggests how schemes should deal with common issues that may arise when implementing an equalisation project.
Countdown Bulletin 49
HMRC has published its latest countdown bulletin relating to the end of contracting-out in 2016. The contents are:
- Final SRS Outputs
- Scheme Contracted Out Numbers (SCONs)
- Incorrect GMP
- Contribution Equivalent Premiums (CEP)
Raising queries with HMRC
TPO upholds pension scam complaint
The Pensions Ombudsman (TPO) has upheld a complaint against the Hampshire County Council pension scheme because of a failure to carry out due diligence before transferring a member’s benefits to a pension scheme that was found to be a scam arrangement. TPO determined that “to put matters right, the Council shall reinstate Mrs H’s accrued benefits in the fund, or provide equivalent benefits, adjusting for any revaluation that has arisen since the transfer and allowing for any lump sum that Mrs H has already received from the scheme”.
Civil Partnership Bill introduced
Mixed sex couples will be able to enter a civil partnership for the first time under new legislation just introduced to the Scottish Parliament.
The formal Brexit proposal from the UK Government to the EU was published on 2 October. A formal response from the EU is expected this week.
Also, the Government is running a number of Brexit Business Readiness events over the coming weeks in various locations.
On a related note, according to a survey by the Pensions and Lifetime Savings Association, 88% of workplace pension fund trustee boards have discussed the potential impact of Brexit on their scheme (up from 63% in 2018).