Developments in Employee Benefits law and practice

23 September 2018

PPF Levy Consultation 2018

The PPF has published the draft levy determination for 2019/20 for consultation. Changes made to last year’s levy rules are working well; so, only minor adjustments are proposed this year.

The levy estimate for 2019/20 is £500 million, down from £550 million for 2018/19. No changes will be made to the levy scaling factor or the scheme-based levy multiplier for 2019/20. This is despite the PPF expecting claims in 2018/19 to remain at a high level and possibly exceed the record level of claims in 2017/18. If the level of claims continues to be high, the PPF warns it may need to adjust the levy next year.

The PPF proposes a new risk reflective levy to cater for the emergence of DB consolidation vehicles.

There was no further information on any impact from the recent Court of Justice of the European Union (ECJ) judgement that the PPF compensation cap was unlawful. The PPF is still considering whether any changes to section 179 valuation guidance are needed and will consult appropriately.

The levy consultation will be open until 5pm on 25 October 2018. The PPF will finalise the rules and publish the levy determination in December.

https://www.pensionprotectionfund.org.uk/DocumentLibrary/Documents/2019-20%20Levy%20Consultation%20Document.pdf

HMRC updates RAS guidance

HMRC have updated guidance on registered pension schemes relief at source annual claims form APSS 106 to explain the deadline of 5 October.

Pension schemes: registered pension schemes relief at source annual claims (APSS 106) explains that form APSS 106 should be used to make an annual claim for recovery of tax deducted by individuals. The guidance has been updated to explain that the form should reach HMRC by no later than 5 October following the end of the relevant tax year.

https://www.gov.uk/government/publications/pension-schemes-registered-pension-schemes-relief-at-source-annual-claims-apss-106

Discussion paper on transfers for DB trustees

A discussion paper for defined benefit (DB) pension plan trustees on whether to include information on transfer options in pre-retirement member communications, and what support to give to members who request a transfer value, has been produced by Eversheds Sutherland in partnership with Royal London.

The purpose of the discussion paper is to assist DB plan trustees who are wrestling with this dilemma.

https://www.eversheds-sutherland.com/documents/services/employment/Eversheds-Sutherland-Royal-London-how-much-should-you-tell-them.pdf

Latest on 21st century trusteeship campaign

The Pensions Regulator (TPR) has today launched a new campaign to protect workplace pension savers by driving up the standards of governance across pension schemes.

The campaign, called 21st Century Trusteeship – raising the standards of governance, is part of TPR’s commitment to support schemes by being clearer and more directive. It outlines how people involved in running schemes can take action to meet expected standards and what action TPR will take if they don’t improve.

Recent research by TPR has shown that while some trustees are doing a good job, many trustee boards, particularly in small and medium schemes, have failed to act on TPR’s codes and guidance to meet standards of good governance.

As part of the campaign, targeted emails will direct trustees, scheme managers, employers and advisers to a new page on TPR’s website where they will find specific and relevant content that sets out clear standards that TPR expects schemes to meet.

They will also be signposted to supporting resources, including guidance within TPR’s codes of practice and practical tools to help trustees raise the standards of governance in their schemes.

The campaign will focus initially on emphasising the fundamental importance of good governance. As it progresses in the coming months, extra content will be added to the website.

http://www.thepensionsregulator.gov.uk/press/tpr-steps-up-21st-century-trusteeship-campaign-to-deliver-good-governance.aspx

New Ombudsman approach to ‘distress’ awards

The UK’s Pensions Ombudsman has introduced a fixed-amount award to compensate individuals who have suffered “distress and inconvenience” as a result of the maladministration of a pensions scheme.

The Ombudsman said the move would enhance transparency, create consistency and manage expectations for all parties to a complaint in situations where an individual had been inconvenienced or spent time and effort pursuing a complaint in a case of maladministration.

https://www.pensions-ombudsman.org.uk/wp-content/uploads/Updated-Non-financial-injustice-September-2018-2.pdf

Number of employees covered by workplace pension reaches 84%

The number of employees saving into a workplace pension has jumped seven percent in a year as a result of the auto-enrolment duties, According to The Pensions Regulator. 84 percent of staff now belong to a workplace pension scheme.

Developments 23 Sep 2018

Response to consultation on investment disclosures

DWP has published its response to a consultation alongside new regulations containing changes to the current investment disclosure regime.

The regulations include several changes to the way schemes currently prepare and revise their investment disclosure documents, including their Statement of Investment Principles.

Schemes will be required to state in their SIP their policy on stewardship, including on voting, engagement and monitoring.

https://www.gov.uk/government/publications/reporting-costs-charges-and-other-information-guidance-for-trustees-and-managers-of-occupational-pension-schemes

Contact:

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

Stephen Williams, Senior Research Consultant | Email: stephen_williams@jltgroup.com