TPR: 21st Century Trusteeship: Following on from recent research, The Pensions Regulator (TPR) has launched a refreshed campaign – part of its 21st Century Trusteeship strategy – to protect workplace pension savers by driving up the standards of governance across pension schemes.
A series of targeted emails will promote a new page on TPR’s website explaining how standards should be met and the consequences if they are not. Initially, the campaign focusses on the importance of good governance, with additional content to be added over time.
CDC schemes inquiry: The Work and Pensions Committee has launched an inquiry into Collective Defined Contributions (CDC) arrangements (aka “Defined Ambition” schemes). The Committee is inviting evidence (by 8 January) from any interested parties on benefits to savers and the wider economy and on converting Defined Benefit (DB) schemes to CDC. Danny Wilding’s blog post exploring the Dutch Pensions system was published shortly before the inquiry was announced which you can read here.
IASB: IFRIC 14: The International Accounting Standards Board (IASB) is reconsidering its interpretation statement IFRIC14 – which relates to limiting the recognition of DB scheme assets (surpluses) in company accounts under international accounting standard IAS19.
Previously, the IASB had said companies’ ability to recognise surpluses would be limited where other parties (such as the pension scheme trustees) had an unfettered right for example to trigger wind-up or settle individuals’ benefits.
The IASB is concerned the most recent interpretation will lead to schemes amending rules to negate the effect. They are instead going to explore a more “principles-based” approach, though no timetable has been given for its introduction.
Auto-enrolment: Phasing of minimum contributions: TPR has issued a reminder and revised guidance for DC scheme managers relating to the phased increase in minimum auto-enrolment contributions from April 2018. The guidance considers how the minimum rates vary according to how earnings are calculated for contributions purposes.
TPR: Perceptions Tracker 2017: The Pensions Regulator has published the findings of its ‘Perceptions Tracker’ survey for 2017. 66% of respondents rated TPR’s performance as ‘very good’ or ‘good’ (compared with 71% of respondents in 2016).
PPF: 2018/19 Levies and third triennium: The Pension Protection Fund (PPF) estimates that it will collect £550 million in levies for 2018/19 – 10% less than 2017/18 (£615 million). In its consultation on the draft levy rules for 2018/19, the PPF also confirms the use of credit ratings for assessing insolvency risk for some sponsors.
The PPF expects two-thirds of schemes to see a lower levy under these new proposals. Final levy rules for 2018/19 will be published in December. In the meantime, Chris Ramsey’s blog sets out the changes in more detail.
For further reading, the blog by Andrew Vaughan looks at the settlement agreed with the Pensions Regulator for Hoover Limited.
DWP: Cridland Review of SPA:The Department for Work and Pensions (DWP) has issued a formal response to the Cridland Review of State Pension Age (SPA) and is to implement the key proposals.
In particular, SPA will now rise from 67 to 68 between 2037 and 2039 (previously between 2044 and 2046), affecting those born after 5 April 1970. The increase will not be legislated for until a further review (incorporating more up to date longevity projections) is conducted.
DWP: DB Schemes used for auto-enrolment: The DWP is consulting on whether the ‘alternative quality requirements’ for DB schemes (used to meet auto-enrolment obligations) are operating as intended. The DWP is also considering specifically whether the treatment of seafarers and offshore workers requires scrutiny.
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