The Week In Pensions provides you with a digest of the most important developments in pensions law and regulation along with highlighting some of the most interesting stories from the pensions industry and national press.
In The Week In Pensions this week:
- Pensions Minister pledges to improve the take-up of pensions guidance;
- PPF consults on the 2021/2022 levy;
- Action Fraud reveals 166 pension scams reported following outbreak of COVID-19 pandemic; and
- HMRC extends COVID-19 easements on temporary pension scheme changes to 31 March 2021
Pensions law and regulation update
Pensions Minister pledges to improve the take-up of pensions guidance
The Pensions Minister, Guy Opperman MP, has said that trials have shown that nudging members towards pensions guidance when they apply to transfer or access their pensions is proving to be effective and will be improved.
Trustees and managers of defined contribution schemes will soon have to provide members aged over 50 with information about the pensions guidance service provided by the Money and Pensions Service and their retirement options. This will apply when the member applies to transfer their flexible benefits to another scheme or to access these benefits within the scheme.
Trustees and managers will also have to ensure that the member has either accessed that guidance or has opted out of taking it before proceeding with the member’s application to transfer or access flexible benefits.
PPF consults on the 2021/2022 levy
On 29 September 2020, the PPF published its consultation on the 2021/2022 levy year. The consultation is essentially divided into two parts, one focusing on COVID-19 related matters and the second on other developments.
Despite the immediate impact of COVID-19 on schemes and sponsors, the PPF does not expect COVID-19 to have a significant impact on 2021/22 levies (broadly because of the insolvency risk model applied and the accounts information it uses). The PPF expects the main effect of COVID-19 to be seen in the levy invoices for the 2022/23 levy year.
The consultation goes on to cover the PPF’s proposals for helping schemes and employers in these uncertain times, including a small scheme levy adjustment, a reduction in the risk-based levy cap and an extension of current payment flexibilities.
The PPF is setting its levy estimate at £520 million (which is £100 million lower than the equivalent figure for 2020/21). According to its analysis, the PPF expects this to mean that the “great majority” of schemes (around 90% of those paying a risk-based levy) will see a reduction in levy relative to their 2020/21 levy invoice.
Action Fraud reveals 166 pension scams reported following outbreak of COVID-19 pandemic
On 1 October 2020, the Home Office published its response to a written question concerning the number of pension scams reported during the COVID-19 pandemic.
In it, the Minister of State for Security, James Brokenshire MP, confirmed that Action Fraud had received 166 reports of pensions scams in the period 24 March 2020 to 25 September 2020. He also highlighted new government guidance on COVID-19 and fraud and cyber crime.
- Click here for the full text of the written question and answer between Neil Gray MP and James Brokenshire MP; and
- Click here for the government’s guidance ‘Coronavirus (COVID-19): fraud and cyber crime’.
HMRC extends COVID-19 easements on temporary pension scheme changes to 31 March 2021
On 29 September 2020, HM Revenue & Customs (HMRC) published edition 124 of its Pension schemes newsletter. The latest edition includes an announcement that an easement relating to certain administrative processes is being extended to 31 March 2021. Many of these are of interest only to pension administrators. One that might be of wider note is it applying to pension scheme returns for 2019 to 2020.
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Gowling WLG has one of the UK’s largest and most experienced pensions law teams. As well as publishing The Week In Pensions, the team issues The Month In Pensions podcast and agenda and regular Insights on key legal developments.
- Click here for the latest Insights from the pensions team at Gowling WLG; and
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