Weekly update on new developments in the pension industry for week commencing 29 April 2018
Financial Guidance and Claims Bill update
Ahead of its Report Stage, an updated House of Commons briefing paper on the Bill has been published, which outlines the provisions of the Bill and the debates on it in Parliament. It reflects Government tabled amendments relating to cold calling and take-up of pensions guidance.
ABI blueprint for drawdown comparison tool
The Association of British Insurers has set out steps required to create a drawdown comparison tool. The ABI believes that joint action is required from the pensions industry and FCA, whilst responsibility for making the tool available should sit with the new Single Financial Guidance Body.
Further Fair Deal consultation
The Ministry of Housing, Communities & Local Government has published its response to the May 2016 consultation on amendments to the Local Government Pension Scheme regulations.
The MHCLG has concluded that it is not in the best interests of LGPS administering authorities, members or employers to introduce the proposal it consulted on to extend Fair Deal 2013 to local authority outsourcings.
The MHCLG remains committed, however, to introducing Fair Deal into the LGPS and will consult on new proposals by the end of the year.
Until the LGPS Fair Deal reforms are introduced, MHCLG confirms that the 2007 Direction (and 2012 Welsh Direction) will continue to have effect in England and Wales and should be followed in all relevant cases.
On a related note other amendments to the LGPS regulations will be taken forward in the Local Government Pension Scheme (Amendment) Regulations 2018, with some drafting changes.
Members entitled to at least 50% compensation from PPF on employer insolvency
The Advocate General has given her Opinion in Grenville Hampshire v The Board of the Pension Protection Fund holding that Article 8 of the EU Insolvency Directive should be interpreted to the effect that every individual employee is entitled to compensation of at least 50% of the total value of their accrued rights in the event of their employer’s insolvency. Also, the aim of the Directive is to ensure a minimum level of protection for all employees, which can only be achieved if the minimum standard applies to, and can be relied on by, each individual employee.
The ECJ judgement is expected within the next few months, but if they agree with the Advocate General, the UK government will have to look at the application of the cap and may introduce a 50% underpin for future payments and may need to revisit past payments.
Three new CMA papers
As part of its investigation into the market for investment consultancy and fiduciary management services, the Competition and Markets Authority (CMA) is currently publishing a series of eight Working Papers. These outline the CMA’s emerging thinking and analysis on a series of key issues and provide an opportunity for comment.
On 26 April, the CMA published three further papers on:
- Barriers to entry and expansion
- Financial performance and profitability
- Competitive landscape
Flexible payments from pensions: latest HMRC statistics
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