Week ending 23 August: Trustees urged to act on DC governance| Pension Scheme Newsletter 71| Unfunded Public Service Defined Benefits Schemes (Transfers) Regulations 2015
Trustees urged to act on DC governance
The Pensions Regulator is calling on trustees of defined contribution (DC) pension schemes to ensure they are on track to meet new requirements introduced in April 2015, which are designed to drive up the quality of governance and administration in workplace DC schemes and deliver good member outcomes. The regulator has published a number of products to help trustees get to grips with the new requirements. The new duties state a scheme must
- meet new governance standards and explain how it has done so in an annual chair's statement
- have an appointed chair who signs the annual statement. The chair should have been appointed by 5 July 2015
- be compliant with the new charge controls, which relate to schemes used as automatic enrolment 'qualifying schemes'.
Schemes which conclude they are unlikely to comply with the charge cap may be planning to use the 'adjustment measure' provision, so that the charge cap won’t apply for a particular default arrangement. Trustees should be aware that the deadline for using the adjustment measure, unless certain exceptional circumstances apply, is 6 October 2015.
This year’s scheme return for DC schemes contains some new questions relating to the April changes and the regulator has produced a checklist to help trustees prepare for completing it.
If a scheme is not compliant it may be subject to enforcement action, including fines.
The Regulator plans to run an education campaign through to March 2016, pausing during November and December to allow for the formal consultation on a revised DC code of practice.
Pension Scheme Newsletter 71
HMRC has published Pension schemes newsletter 71 which, inter alia:
- provides an update on changes to HMRC’s Recognised Overseas Pension Scheme (ROPS) notification list
- includes a reminder that individuals who exceed the AA must declare this on their Self-Assessment tax return and pay a tax charge
- contains a note that HMRC is currently considering how its rules can be adapted ahead of the introduction of the tapered AA from 6 April 2016.This may entail changes to the rules around the issue of automatic pension savings statements
- reminds that, from 6 April 2016, all pension input periods (PIPs) will be aligned with the tax year
reminds schemes to signpost TPR’s guidance on pension scams wherever possible.
Unfunded Public Service Defined Benefits Schemes (Transfers) Regulations 2015
Under these regulations (SI 2015/1614), transfers from an unfunded public service defined benefits scheme to a qualifying recognised overseas pension scheme, which can provide flexible benefits as a result of the transfer, are prevented. The change comes into force on 7 September 2015. The rational for this is that, under unfunded public service pension schemes, contributions of current members and employers are used to pay for the pensions of current pensioners, and any shortfall is covered by taxpayers.
John W. Wilson LLB(Hons) FPMI ACII, Head of Research| Email: firstname.lastname@example.org
Julian Rowe, Head of Technical | Email: email@example.com