Developments in Employee Benefits law and practice

26 December 2016

Weekly update on new developments in the pension industry for week ending 25 December 2016. News covered are: Consultation on new financial guidance body | WPC publishes report into DB pension schemes | Consultation on DC bulk transfers | Pensions Dashboard update | Spring Budget date announced

Consultation on new financial guidance body  

The government is collecting views on a new single financial body to be in place after autumn 2018. The consultation proposes to bring publicly funded debt advice, pensions and money guidance into one body. The government believes the new body will help consumers make effective financial decisions and will provide a simpler service to those with multiple financial guidance needs.

The proposed body will be responsible for:

  • debt advice for those in debt problems
  • guidance on occupational or personal pensions, accessing defined contribution pots, and planning for retirement
  • helping consumers avoid financial fraud and scams
  • co-ordinating and influencing efforts to improve financial capability
  • co-ordinating non-governmental financial education programmes for children and young people.

WPC publishes report into DB pension schemes

The Work and Pensions Committee (WPC) inquiry on the collapse of BHS provided the backdrop to this report on defined benefit (DB) pension schemes. In the report, the WPC make recommendations for changes which should be taken forward or consulted on in a prospective government green paper due to be published early 2017.

Key recommendations are:

  • A so-called ‘nuclear deterrent’. According to the WPC, the government should consult on new enforcement powers for The Pension Regulator to impose punitive fines that could treble the amount payable. It is expected that such a fine would never need to be levied in practice, as it would act as such a strong deterrent to avoiding pension responsibilities.
  • Empowered trustees and scheme members, including enabling trustees, subject to TPR approval, to consolidate small schemes in an aggregator fund to be managed by the PPF; and agree changes to the indexation of pension benefits in instances where such changes are needed to make a scheme sustainable.
  • Greater flexibility for scheme members to take their pensions as lump sums.
  • A nimbler regulator, intervening earlier to nip potential problems in the bud
  • A PPF levy that fairly reflects risk
  • Facilitating scheme restructuring in mutual interest
  • Mandatory clearance in certain circumstances.

Consultation on DC bulk transfers

Transfers from occupational pension schemes to other occupational pension schemes (but not to personal pension schemes) are already allowed without the need for member consent when certain conditions apply. The scheme rules must expressly permit transfer to be made without consent.

The DWP wants to make sure the provisions, which were originally designed for a defined benefit (DB), rather than a defined contribution (DC) landscape, can work effectively for DC schemes. It is not considering any changes to the requirements needed for bulk transfers of DB pensions without member consent in this call for evidence.

The DWP is interested in how it can simplify the current process for DC to DC bulk transfers without consent, while ensuring members are adequately protected. It is particularly interested in:

  • transfers from occupational schemes, including views on the role of the actuarial certificate and the relationship between the transferring and receiving schemes; and
  • transfers from stakeholder pension schemes, by allowing providers of such schemes to transfer members to more modern and often lower cost schemes.

Pensions Dashboard update

Six firms have been chosen as technology development partners on the Pensions Dashboard, creating the first prototype of an online service which will show people all their pension savings together. The project is being managed by the Association of British Insurers on behalf of HM Treasury, with the prototype due to be ready for testing in March 2017.

Over 60 firms expressed an interest in taking part in the project on a pro bono basis. After a competitive and rigorous evaluation process, the firms have been assigned to five different areas of the project as follows:

Pensions Dashboard User Interface (how people will interact with the dashboard)

Runpath and Experian (joint pitch)

Pensions Finder Services (how the system retrieves information on people’s different pension pots)

Origo and Experian

Identity Providers (verification of people’s identity and personal details)

Safran and Experian

Integration Service Providers (providing the additional connections some pension firms will need to share data with the dashboard)

ITM and Aquila Heywood

Matching / Data Quality Analysis (overcoming the challenges of finding everyone’s pension in every system)

ITM and Experian. 

Spring Budget date announced

The government has announced that the 2017 Spring Budget will be published on Wednesday 8 March 2017. This will be the last Budget to take place in the Spring, as confirmed by the Chancellor of the Exchequer in the 2016 Autumn Statement.


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

Stephen Williams, Senior Research Consultant | Email: