Cross-border arrangements
Pension schemes operating cross-border currently need to be fully funded at all times, on a scheme specific, “technical provisions” basis. This will continue to be the case whilst the Government negotiates Britain’s exit from the EU and could continue into the future, as the cross-border requirements also apply to EEA members, not just full EU Member States.
TPR and the PPF
Given the focus in recent years by UK legislators and regulators on measures for improving standards for workplace and personal UK pension schemes, it seems unlikely that existing regulatory protections for pension scheme members would be stripped away purely because of their origins in EU law. As such, we would expect that the remits for TPR and the PPF will continue largely unaltered.
Equality legislation
Protections for individuals against discrimination also largely stem from EU law. A move away from these would be seen as a retrograde step, and one which the UK Government is unlikely to choose. However, there could be challenges to some existing provisions, such as survivor benefits for same sex spouses and civil partners. Survivor benefits are currently restricted to service from 5 December 2005, and from 6 April 1988 for contracted-out benefits. With “Brexit” now a reality, we could see fresh challenges for greater parity, along the lines of the Walker v Innospec case.
Data Protection
Whilst the new General Data Protection Regulation, which will apply to Member States from 25 May 2018, may not apply directly to the UK following its exit from the EU, it will remain relevant for pension schemes and others, wherever data is transferred between the UK and the remaining EU Member States. The UK’s Information Commissioner has said that if the UK wants to trade with the single market on equal terms, it would have to prove “adequacy”, by showing that UK data protection standards are equivalent to the new EU data protection framework.
Financial sector regulation
The financial sector is subject to heavy regulation by the EU. Pension schemes are mostly indirectly affected by this regulation through their investment activities and dealings with financial institutions, asset managers and insurers. The pace and scope of regulation has picked up in response to the global financial crisis and consumer mis-selling scandals. It seems unlikely that Brexit will significantly lighten the regulatory burden for the financial services sector.
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