Developments in Employee Benefits law and practice

16 September 2019

New public sector pensions consultations

Consultation on NHS pension scheme flexibility

The Department of Health and Social Care has launched a consultation on a new set of proposals to offer more flexibility to senior clinicians in the NHS Pension Scheme. The consultation seeks to address concerns that pension tax charges are making NHS senior staff retire early or change their working habits. Proposals include a “flexible accrual” option where members can choose an accrual level in 10% increments and the option to “fine tune” pension growth towards the end of the scheme year, when total earnings are clearer.

Changes to independent schools and teachers' pension scheme

The Department for Education (DfE) has launched a consultation seeking further views on proposed changes to the participation of independent schools in the Teachers’ Pension Scheme. 

Auto-Enrolment research

The Pensions Policy Institute has published an analysis on pension charging structures and future strategies. The report examines the extent to which charging structures affect savers’ retirement outcomes and what more could be done to help provide people with a retirement outcome that meets their needs. The analysis shows that automatic enrolment has led to a significant expansion in the number of people paying into workplace pensions. Also, the introduction of the charge cap on default schemes has placed emphasis on charges, transparency and value for money.

Separately, the Pensions Regulator has published its monthly report on automatic enrolment. Between July 2012 and the end of August 2019, 1,552,690 employers confirmed that they had met their automatic enrolment duties. The report also states that 10,149,000 eligible jobholders were automatically enrolled into an automatic enrolment pension scheme during the same period.

Shareholder Rights Directive

This factsheet provides a summary of what occupational pension scheme trustees need to do and by when –

DC Schemes

Update their SIP for policies on financially material considerations, non-financial matters, and stewardship (except the information concerning capital structure, management of actual and potential conflicts of interest and another stakeholder) by 1 October 2019.

Trustees need to be transparent about their scheme’s arrangements with their asset managers, including how the arrangement incentivises the asset manager to act in accordance with trustee policies and the duration of the arrangement. Trustees need to include this information (and the information concerning capital structure, management of actual and potential conflicts of interest and another stakeholder) in their SIP by 1 October 2020.

Trustees must publish their SIP free of charge online from 1 October 2019, but they do not have to publish their asset manager policy, nor the part of their stewardship policy concerning capital structure, management of actual and potential conflicts of interest and other stakeholders until 1 October 2020.

An implementation statement, reporting against the policies in the SIP should be published from 1 October 2020, but they will not have to include any information detailing how they have implemented their asset manager policy and how they have implemented the part of their stewardship policy concerning capital structure, management of actual and potential conflicts of interest and other stakeholders until 1 October 2021.

Trustees need to prepare their annual report for the previous year within 7 months of the end of the scheme year.

In a scenario where the implementation statement would cover a period before the new SIP requirements come into force, and the scheme did not voluntarily have a stewardship policy in place, the implementation statement would only be required to report against the stewardship policy in place from 1 October 2019 to the end of the scheme year.

By 1 October 2021, trustees need to produce and publish online information, detailing how they have implemented their asset manager policy and updated engagement policy, including voting behaviour by, or on behalf of, trustees (including the most significant votes cast by trustees or on their behalf) and state any use of the services of a proxy voter.

The information in the Chair’s statement and the annual report which must be published online, whether published on a single page or across more than one page, should be made available on a webpage in a way which enables the information displayed to be printed by the reader using widely used web browsers, using the menus available via the browser, or functionality on the page itself.

The webpage on which the information that must be published is displayed should be such that the relevant information in the Chair’s statement and the annual report should be capable of being downloaded and stored using a modern web browser, again either via the browser menus or the page’s functionality.

DB Schemes

Update their SIP for policies on financially material considerations, non-financial matters, and stewardship (except the information concerning capital structure, management of actual and potential conflicts of interest and another stakeholder) by 1 October 2019.

Trustees need to be transparent about their scheme’s arrangements with their asset managers including how the arrangement incentivises the asset manager to act in accordance with trustee policies and the duration of the arrangement. Trustee’s need to include this information (and the information concerning capital structure, management of actual and potential conflicts of interest and another stakeholder) in their SIP by 1 October 2020.

Trustees of a DB scheme will have to publish their SIP free of charge online from 1 October 2020, but they will not have to publish information detailing how they have implemented their engagement policy, including voting behaviour by, or on behalf of, trustees (including the most significant votes cast by trustees or one their behalf) and state any use of the services of a proxy voter until 1 October 2021.

Trustees need to prepare their annual report for the previous year within 7 months of the end of the scheme year.

By 1 October 2021, trustees need to produce and publish online, detailing how they have implemented their engagement policy, including voting behaviour by, or on behalf of, trustees (including the most significant votes cast by trustees or on their behalf) and state any use of the services of a proxy voter.

The information in the annual report which must be published online, whether published on a single page or across more than one page, should be made available on a webpage in a way which enables the information displayed to be printed by the reader using widely used web browsers, using the menus available via the browser, or functionality on the page itself.

The webpage on which the information that must be published is displayed should be such that the relevant information in the annual report should be capable of being downloaded and stored using a modern web browser, again either via the browser menus or the page’s functionality.

 

 

 

 

 

 

 

Brexit update

  • The Bill aiming to prevent the UK leaving the EU on 31 October with no deal received Royal Assent.
  • A Government motion to call a General Election on 15 October was re-introduced and defeated. So, there will be no election before late-November.
  • Parliament has been prorogued with a view to it not being re-opened until 14 October. However, the Inner House of the Court of Session has ruled that the decision to suspend parliament for several weeks was “unlawful”. There will now be a Supreme Court hearing on 17 September.
  • The House of Commons Library has updated briefing paper CBP-7629, which looks at the implications of Brexit for workplace and personal pensions.

 

Contact:

Julian Rowe | Policy, Professionalism & Research | email: Julian.Rowe@MERCER.com