What have Pierce Brosnan, Whoopi Goldberg, Donny Osmond, Kiefer Sutherland, Sarah Palin, Jim Carrey, Charlie Sheen and Priscilla Presley all got in common? They all became grandparents before the age of 50. They are not alone. Many new parents have parents who are still of working age. And as the goalposts for the state pension … Continue Reading
In January 2017 the Pensions and Lifetime Savings Association (PLSA), as a representative body for pension funds, published its amended Corporate Governance Policy and Voting Guidelines. The PLSA observes that many of its members hold equity stakes in UK companies as part of their investment portfolio and have a clear interest in promoting the success … Continue Reading
After a busy 2016 in the pensions world it looks likely that 2017 will be just as eventful. The UK government will be following up on various consultations and finalising numerous pieces of legislation that are currently in draft. The planned green paper on DB pension reform should also make for some interesting reading, especially … Continue Reading
Just as the demise of Robert Maxwell led to a sea change (excuse the pun!) in the governance of pension plans via the Pensions Act 1995 it seems that the equally high-profile collapse of BHS may herald a major shift in the regulation of pension plans. The Work and Pensions Committee report on defined benefit … Continue Reading
The first half of 2017 will see the introduction of the apprenticeship levy in the UK, which is expected to encourage larger employers to take on more apprentices. Where an employer’s payroll is more than £3m, there is no escaping the levy and many will seek to recoup their levy cost by hiring new employees as … Continue Reading
On 8 December 2016 the European Council published that it had adopted IORP II, which was approved and agreed by the European Parliament on 24 November 2016. The European Council set out in its publication that the directive is aimed at facilitating the development of institutions for occupational retirement provision (IORPs) and better protecting pension … Continue Reading
The demand for corporates and wealthy individuals to adopt greater tax transparency continues to build momentum – the significance of the global reaction to it makes the recent Autumn Statement seem like chicken feed. The reforms being formulated could have a dramatic impact upon tax strategies and corporate governance generally. Whilst it will no doubt … Continue Reading
The UK Pensions Regulator has power to prohibit a person from acting as a pension plan trustee. When it does so, the reputational consequences for the individual can be severe and go beyond the pensions sphere. In 2011, three trustees of a pension scheme were prohibited from acting as trustees of any occupational pension plans. … Continue Reading
CPIH is to become the preferred method of UK consumer price inflation from March 2017, according to a statement issued by the National Statistician on 10 November 2016. This follows a wide-ranging and long-lasting process of consultation and consideration. But what will be the impact on UK pensions? Pension inflation measures have been in the … Continue Reading
UK Prime Minister, Theresa May, has indicated that the Article 50 exit negotiation will be triggered by the end of March 2017. Absent the unanimous agreement of all other 27 EU member states, the UK will automatically cease to be in the EU and subject to its rules and regulations two years after the notice … Continue Reading
The Determinations Panel of the Pensions Regulator has recently exercised its rarely used power under section 67G of the Pensions Act 1995 to declare a deed amending the rules of a pension plan void in its entirety. Background The DCT Civil Engineering Staff Pension Fund was a small pension plan with only 11 members and … Continue Reading
New legislation has corrected an anomaly that has arisen in relation to trivial commutation rights for members of certain UK Defined Contribution (DC) and hybrid pension plans. Following changes made on 6 April 2015 to the statutory definition of “trivial commutation lump sum” (TCLS), a TCLS can now only be paid from a Defined Benefit … Continue Reading
The UK Companies Act 2006 currently allows companies to appoint a corporate director as long as at least one of the directors is an individual. As most professional trusteeship providers operate as companies, the law effectively allows them to be appointed as a corporate director of the corporate trustee of a pension plan. However, the Small Business, … Continue Reading
The Department for Work and Pensions (DWP) has launched a consultation on proposed changes to the Pension Protection Fund (PPF) compensation cap, which would increase the potential compensation for long-service pension plan members. At present, members who have not yet reached their pension plan’s normal pension age when their plan enters the PPF are paid … Continue Reading
Following a change in UK legislation there is now uncertainty about if, and how, Guaranteed Minimum Pensions (GMPs) can be commuted for cash before GMP age (65 for males and 60 for females). Some pension plan advisers are suspending trivial commutations pending trustee instructions and we are increasingly being contacted by clients for advice on … Continue Reading
Keen readers will recall the long-running saga of the correct treatment of VAT incurred by employers on pension fund costs. Following rulings by the ECJ, HMRC had determined that it needed to change existing UK practice. In particular, this affected defined benefit schemes where HMRC had allowed employers to recover some, but not all, of … Continue Reading
The UK Pension Protection Fund (PPF) is reviewing its insolvency risk model with Experian. The proposals being considered are particularly relevant to the financial services and charity sectors. They would be introduced from 2018/2019 (and will not be part of the draft levy rules and levy estimate for 2017/18, which we expect will contain few … Continue Reading
Many group companies operate a service company to employ staff and second them to other group companies. These arrangements are often not fully documented, particularly in groups who see themselves as one business. However, this can cause issues on an insolvency, as shown recently in the case of MF Global UK Ltd (In Special Administration), … Continue Reading
On 22 July 2016, the Pensions Regulator published its 21st Century Trusteeship and Governance discussion paper. The Regulator is acutely aware that boards of occupational pension plans carry out a very important and difficult role. Trusteeship is voluntary and, in aggregate, trustees are responsible for managing £1.8 trillion of assets on behalf of 32 million … Continue Reading
On 24 May 2016 a new General Data Protection Regulation (GDPR) was adopted by the European Union – this is a radical reform which will have a material impact on the operation of pension plans. The GDPR will be directly applicable in all EEA countries (so no implementing legislation is required from the UK Government) … Continue Reading
In the wake of the Brexit vote, several asset managers have closed their UK property funds to redemptions – commonly known as imposing a ‘gate’. This highlights why pension funds and other investors should pay careful attention to the gating provisions in fund documents, both before entering into an investment and as part of the … Continue Reading
Whilst it is too early to tell what the full implications of the Brexit vote will be, we have had a number of enquiries from clients asking what their duties are in relation to their investment strategy. We have therefore set out some general guidelines for action now and in the short to medium term. … Continue Reading
Whilst the impact of the Charges and Governance Regulations on defined contribution pension plans is widely understood, the inconsistent approach to DC AVCs within defined benefit plans has caused some confusion. Unlike the requirements for a “value for money” assessment, chairperson’s statement and charge cap, which do not apply to plans where the only DC … Continue Reading
“Code of practice no. 13: Governance and administration of occupational defined contribution trust-based schemes” may not be the most imaginative of titles, but to coin a popular phrase, “It does what it says on the tin”. It also sets out a vast number of ‘expectations’ to be placed upon trustees – we have counted 126 … Continue Reading
