Pensions Regulator: updated how-to guide for DC governance. Two of the "how-to" guides have been updated: the value for members guide which refers to the industry-led Cost Transparency Initiative which has standardised templates, and communicating and reporting guide which amends wording relating to the duty to provide information to members on request about pooled funds. See Value for members guide and Communications and reporting guide
Pensions Regulator: Quarterly compliance and enforcement bulletin for second quarter of 2019. This showed that there had been a decrease in the number of times the Regulator had issued compliance notices and used its frontline and auto-enrolment related powers. However, the number of schemes who will have one-to-one supervision this financial year will increase from 35 to 100. See bulletin
NHS Pension Scheme: new proposals to deal with annual allowance tax issues. The government has announced that the previous "50:50" option put forward in July is to be replaced with a new set of measures which are likely to come into force on 6 April 2020 and would allow members to set their pension accrual rate at the start of the tax year in increments of 10% as well as employers having the option to pay additional salary in exchange for any unused employer contributions. See announcement
Commons Work and Pensions Committee: recommendations to improve transparency of pension costs and charges. These included using standard templates for the disclosure of costs and charges by pension fund asset managers, the FCA introducing a 0.75% cap on costs and charges under the new investment pathways that regulated firms will be obliged to offer non-advised drawdown customers from August 2020 and a timeframe for the commercial pensions dashboard launch. See recommendations
Department of Work and Pensions: consultation to implement the CMA investment consultancy recommendation. The draft Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2019 introduce new duties for trustees of affected occupational pensions schemes, and change the way schemes manage their relationships with their investments consultants and fiduciary management providers. See consultation
Superfunds: Legal and General develop their own model. This will be aimed at schemes that have a "medium" level of funding but may not be able to afford bulk annuity insurance. Although bearing similarities to the superfund model, it will only partly split the pension scheme from its employer sponsor, and will be regulated by the Prudential Regulation Authority as opposed to the Pensions Regulator (unlike Clara and the Pensions SuperFund).
Pensions and Lifetime Savings Association: new ESG guide. This has been published to assist trustees who are unsure of how ESG (Environmental, Social and corporate Governance) interacts with their fiduciary duties and explains the concept of ESG in decision-making and how it can be integrated into the oversight and investment strategy of pension schemes and provides a template to help schemes create their own ESG policy. See guide
Court of Appeal case: rectification of contracts for common mistake. In these circumstances the Court (in FSHC Group Holdings Ltd v GLAS Trust Corporation Ltd) held that it should look at the parties' actual intentions of what was agreed (i.e. a subjective approach) and that an objective approach was not appropriate when rectifying a document to reflect a common intention which fell short of a binding agreement. This will make it harder to bring a successful claim.
NEST joins industry "Star" initiative to reduce DC transfer times. Star is a good practice steering committee aimed at improving DC scheme standards by reducing transfer times to less than 21 days.
High Court: Refusal to sanction insurance business transfer of annuity portfolio. The Court refused sanctioning the transferring over £12 billion from an individual and bulk annuity policy from Prudential Assurance Company Ltd to Rothesay Life plc. The judge in exercising his discretion under Part 7 Financial Services and Markets Act 2000 chose not take into account the opinions of the independent expert or regulators in relation to the nature of the annuity polices.
To see the full article click here
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.