Developments in Employee Benefits law and practice

08 October 2018

TPR Master Trust Policy

The Pensions Regulator (TPR) has revised its supervision and enforcement policy following a consultation highlighting changes made by the Pension Schemes Act 2017 and the Occupational Pension Schemes (Master Trusts) Regulations 2018.

The updated policy is on the TPR website.

FCA issues PS on pension transfer advice

Further to its consultation paper (CP18/7), the FCA has now published this Policy Statement (PS 18/20) that sets out changes to rules and guidance on advising on the transfer of safeguarded benefits.

The new rules and guidance include:

  • raising qualification levels for pension transfer specialists;
  • guidance to clarify expectations that advisers should be exploring clients’ attitudes to the general risks associated with a transfer, in addition to their attitude to investment risks;
  • guidance to illustrate how firms can carry out an appropriate ‘triage’ service (an initial conversation with potential customers), without stepping across the advice boundary;
  • a requirement for firms to provide a suitability report regardless of the outcome of advice; and
  • updating assumptions to be made when valuing increases applied to DB scheme benefits.

The FCA is not proceeding with its proposal to amend the definition of a pension transfer at this time.

Contracting-Out Countdown Bulletin

The latest Bulletin from HMRC covers –

  • Financial reconciliation
  • Important amendment to phase 7 rerun plan
  • HMRC banking details
  • Data quality
  • Contribution adjustment action as a result of scheme reconciliation

What drives UK DB pension funds’ investment behaviour

This Bank of England staff working paper considers how pension funds can be expected to adjust their asset portfolios in the face of different exogenous shocks.

Results suggest that pension funds are sensitive to shocks that change their funding ratios — that is, the ratio of pension assets to liabilities. Deteriorations in funding ratios encourage pension funds supported by financially weaker corporate sponsors to switch some equity holdings into bonds. This is because reduced funding ratios weigh on the perceived vulnerability of already weak corporate sponsors. But similar deteriorations in funding ratios encourage funds supported by financially stronger corporates to increase their equity holdings to benefit from their higher expected returns. In contrast, shocks that result in material improvements in funding ratios — for example, resulting from a large rise in interest rates — encourage all pension funds to increase their bond holdings to ‘lock in’ those improved positions.

LGPS amendments to survivors pensions

The Government is consulting on amendments to survivors' pensions in the Local Government Pension Scheme (LGPS). This consultation follows decisions in Walker v Innospec and Elmes.

Proposals include –

  • Amendments so that survivors of registered civil partnerships or same-sex marriages will be provided with the same benefits as those provided to widows (rather than the current position of providing benefits equivalent to widowers).
  • a power to issue statutory guidance on the operation of the LGPS rules.


John W. Wilson LLB(Hons) FPMI ACII, Head of Research| Email:

Stephen Williams, Senior Research Consultant | Email: