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Pensions Spotlight – Issue 77

Pensions Spotlight – Issue 76 & 77

10 November 2022

Welcome to Pensions Spotlight, a monthly selection of items of interest from the world of pensions.

Mid-life MOT expansion to help tens of thousands assess work, wellbeing, and finances

Tens of thousands of Brits will be helped to take stock of their work, wellbeing and finances through a £5 million expansion of the Department for Work and Pensions (DWP) “Mid-life MOT” initiative. The Mid-life MOT is a review for workers in their 40s and 50s that helps them take stock of their finances, skills and health and enables them to better prepare for their retirement and build financial resilience.

As part of the expansion, Mid-life MOTs will be delivered online, in the private sector and through the DWP’s national network of jobcentres.

The job centre expansion will see staff sit down with older jobseekers to examine their retirement planning and help them not only identify how to overcome barriers to employment, but also explore any avenues to help improve their earnings and saving potential.

HMRC Newsletter 140, 141 and 142

HMRC has published Pension Schemes Newsletter 140, which contains articles on:

  • Pension scheme arrears and interest (covering equalising for GMP)
  • Managing pension schemes service
  • Accounting for Tax returns
  • The Pensions Regulator’s blog post on pension scams
  • Scheme pays reporting clarification

HMRC has published Pension Schemes Newsletter 141, which contains articles on:

  • Legislation Day (L-Day) 2022
  • Relief at source — annual return of information for the tax year 2021 to 2022
  • Managing Pension Schemes service
  • Accounting for Tax (AFT) returns
  • Pension flexibility statistics and
  • Qualifying Recognised Overseas Pension Schemes (QROPS) transfer statistics.

HMRC has published Pension Schemes Newsletter 142, which contains articles on:

  • Relief at source
  • Normal minimum pension age
  • Migrating your pension schemes
  • Accounting for Tax (AFT) returns
  • New scams strategy from The Pensions Regulator

PASA publishes dashboard accuracy data guidance

In July, the Pensions Administration Standards Association (PASA) issued a press release confirming guidance on dashboard data accuracy. Accuracy testing and validation are a step further than typical pension scheme data reviews, and this guidance helps schemes navigate this.

Kristy Cotton, Chair of the PASA Data Working Group, commented: “As the dashboards launch dates creep ever closer, trustees need to be able to accurately confirm their saver’s data is a match to dashboards requests, making it vital the data held is accurate and has been validated. This guidance provides a list of the various data sources available to accurately confirm if a pension member is alive or deceased, an address, date of birth, name, NINO. As a minimum, pension schemes should consider ensuring name, date of birth, and NINO isn’t only present, but also accurate to ensure the correct data is available to be searched by a dashboard enquiry.”

PLSA Cyber Risk Made Simple

The Pensions and Lifetime Savings Association (PLSA) has produced a Cyber Risk Made Simple guide. Cybercrime is a threat to pension funds as holders of large volumes of personal and financial data on members who depend on them for a secure income in retirement. The cyber security of pension schemes is therefore crucial to the financial security of their members, which is why the Pensions Regulator’s new single code includes a section on cyber risk. The guide, produced in partnership with Aon and Crowe, may help pensions professionals understand the nature of the cyber threat and take action to ensure they have skills and processes in place to deal with a growing and evolving crime.

PLSA Own Risk Assessment guide

The PLSA published a made simple guide for Own Risk Assessments. The Pensions Regulator’s draft Single Code of Practice requires governing bodies of DB and DC schemes to have in place an effective system of governance (ESOG) and complete the “substantial process” of an own risk assessment (ORA).

There is little guidance on how schemes should approach it, what the finished product should look like and how smaller schemes can meet the requirements. This Made Simple Guide, produced in partnership with LCP, cuts through some of the uncertainty around the ORA with practical tips on collating the information needed.

TPR and DWP joint statement on transfers

The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 have now been in force for six months, and the Department for Work and Pensions (DWP) and The Pensions Regulator (TPR) continue to review how they are operating in practice. TPR encourages trustees and scheme administrators to share relevant feedback with them as part of the review DWP has committed to undertake. TPR has also updated its guidance on dealing with transfer requests, issued last November when the Regulations were made. The DWP will consider these matters further in its review of the Regulations, with its report due to be published 18 months after the Regulations came into force.

Guy Opperman resigns….and is then re-appointed as Pensions Minister

On 6 July, Guy Opperman resigned as Minister for Pensions and Financial Inclusion. In a letter to the Prime Minister, posted on Twitter, the longest-serving Pensions Minister to date said: “It has been the honour of my life to serve as a Government minister, under three successive Prime Ministers, including these last five years as Pensions Minister... I am proud of what we have achieved at the [DWP]. I want to put on record my thanks to the DWP civil servants and ministerial teams I have worked with to produce and pass five Acts of Parliament, grow workplace and state pensions to record levels, and [pass] the ground-breaking Pension Schemes Act that dramatically reforms pensions in the UK.” Mr Opperman then asked the Prime Minister to step down, concluding: “It is... with deep regret that I resign from your Government.”.

On 8 July, Guy Opperman was re-appointed as the Minister for Pensions and Financial Inclusion after handing in his resignation on the preceding Friday in protest over Prime Minister Boris Johnson’s leadership. In a statement on Twitter on Friday evening, Mr Opperman said he has “agreed to help DWP navigate the next few weeks while we decide the appointment of a new Prime Minister”. Mr Opperman said that he agreed when the Chief Whip asked him to help until the new Prime Minister was chosen due to a number of outstanding issues, including:

  • Several pieces of legislation/regulations are to be discussed in Parliament over the next two weeks,
  • The extra cost of living support for pensioners to be organised
  • The continued expansion and take up of pension credit, worth £3,300 on average
  • Remaining urgent work on the dashboard, superfunds and DB issues
  • An outstanding ESG consultation
  • Ongoing correction exercises, and
  • Three to four pending Private Member’s Bills.

PDP blog on collaboration on dashboards

The Pensions Dashboards Programme (PDP) has published a blog by Chief Technology Officer at Moneyhub, Dave Tonge. Mr Tonge reflected on the alpha build phase, how multiple dashboards will help consumers, and the importance of the upcoming beta testing phase. Mr Tonge said: “Moneyhub is delighted to be one of the collaborative partners working with the [PDP] and to have connected our alpha dashboard to the digital architecture last month. We already knew from our Open Banking experience that cross-industry collaboration is critical to successfully offering consumers more control over their money... Collaboration has also been key in getting pensions dashboards to work in the alpha phase over the last six months. There’s a huge variety of parties who need to work together to make dashboards a reality.”

Pensions Dashboards standards consultation

The Pensions Dashboards Programme (PDP) launched a consultation on pensions dashboards standards. The PDP said the purpose of the standards is to “ensure the security, stability, and effective operation of dashboards” and to “set out the technical and operational detail underpinning the primary and secondary legislation and outline the requirements for all pension providers and dashboards connecting to the ecosystem”. The consultation sought views from relevant stakeholders on the content and application of the standards and guidance and any areas where further clarification or detail is required. The consultation closed on 30 August 2022.

DWP publishes consultation response on Pensions Dashboards

The DWP has published the response to its consultation on the draft Pensions Dashboards Regulations 2022, which ran from January to March 2022. The consultation sought views on a range of policy questions relating to the creation of pensions dashboards, including draft Regulations showing how the policy would be turned into law. This was the first of two consultations on pensions dashboards, with the further consultation closing on 19 July.

New Pensions Ombudsman and PPF Ombudsman

After seven years, Anthony Arter has left the role of Pensions and PPF Ombudsman and been replaced with Dominic Harris. Mr Harris will take over on 16 January 2023. Mr Harris said: “I am delighted to be appointed as the new Pensions Ombudsman. The Ombudsman has a key role to play in ensuring access to justice in the pensions arena, and I am proud to be able to continue the good work of Anthony and his team at the organisation.”

CDC code of practice

In July, TPR produced its Collective Defined Contribution (CDC) Code of Practice.  It comes into effect from the 1 August. This key step will enable the code to complete its legislative passage in time for trustees to apply from 1 August for authorisation to operate a CDC scheme. The code is expected to be made after it has laid in Parliament for 40 days. The Code is split into sections covering topics like applying for authorisation, the criteria for authorisation, supervision and reporting.

FCA rules/guidance on new consumer duty

In July, the FCA published guidance and final rules on the new consumer duty requirement. It will set higher and clearer consumer protection standards across financial services and require firms to put their customers’ needs first. This will mean considering their customers’ needs, characteristics and objectives, which will include vulnerable customers.  The new rules will be phased in, starting from 31 July 2023 for new/existing products or services and from 31 July 2024 for products or services which are closed to new business and renewals. It will additionally apply to FCA authorised firms dealing with trust-based schemes.

CDC scheme open for authorisation

From 1 August, CDC schemes applications are accepted by TPR. These schemes allow savers to pool money into a single fund which pays an annual income as an alternative to DB and DC schemes.   There is only one scheme on the horizon so far (Royal Mail scheme), but it is hoped that these vehicles will provide a big improvement in member outcomes.

The DWP hailed the launch of CDC schemes as an “injection of innovation” into workplace pensions. Minister for Pensions and Financial Inclusion Guy Opperman said: “CDC schemes have the potential to transform the UK pensions landscape. It is abundantly clear that, when well-designed and well-run, they have the potential to provide better retirement market outcomes... I have no doubt that millions of pension savers will benefit from CDCs in the years to come.”

In other CDC news, The House of Commons Library has updated briefing paper CBP-8674, which looks at the development of Collective Defined Contribution (CDC) pension schemes in the UK.

PASA Dashboard guidance – Pensions Values

In August, PASA published guidance on value data for pensions dashboards. The guidance includes details on understanding value data requirements; understanding readiness to meet those requirements; and creating an action plan, including the provision of accrued entitlements and the provision of Estimated Retirement Income (ERI) Benefits and communicating with parties who need to be involved with the action plan.

PASA Chair Kim Gubler commented: “Value data is a complex section of the dashboards ‘view request’ as it requires additional calculations to produce accrued and/or projected values. It’s essential pensions administrators understand what is required for their scheme to adhere to pensions dashboard regulations.”  

FCA consultation on redress calculations for unsuitable pension transfer advice

The FCA has published a consultation proposing updates to how redress is calculated for unsuitable DB pension transfer advice. Their most recent review found that their current methodology remains appropriate, but they are proposing updates to ensure the guidance reflects actuarial best practice. Any updates will apply to cases that have not been settled when the changes come into effect. Firms should continue to calculate and offer redress in line with the FCA's existing requirements and should also explain that customers have the option of waiting for the outcome of the consultation to settle their cases.

The consultation is now closed.

HM Treasury consultation on Public Sector exit payments

HM Treasury has published a consultation on a new administrative control process for public sector exit payments of over £95,000 and amendments to the process for special severance payments. HM Treasury seek views on the guidance and whether it meets the policy intent.

The consultation is now closed.

Cabinet Office consultation on reform of the Civil Service Compensation Scheme 2017

In August, the Cabinet Office published a supplementary consultation document relating to the reform of the Civil Service Compensation Scheme following the publication of an earlier consultation in 2017. The new supplementary consultation document provides commentary on the consultation to date and sets out the Government’s proposals in the current economic context.

44% of Amber flags MAPS sessions are for unknown reasons – FOI reveals

A Freedom of Information request (FOI) requested by Quilter revealed 44% of the Money and Pensions Service (MAPS) amber flag guidance sessions are conducted without the knowledge of the reason for the flag being raised. According to the FOI response received, MAPS did not know the reason for 1,266 of the 2,875 sessions conducted from April to June this year.

PASA publishes DMC guidance

In August, the PASA Pensions Dashboards Working Group published an updated version of its Dashboards Data Matching Conventions (DMC) Guidance. The Guidance was originally issued in December 2021 and has been updated to include a call to action, detail the next steps being worked on and provide links to other industry guidance.

Advisers jailed over £20m pension fraud

Two advisers involved in an elaborate pension fraud worth over £20m have been jailed for six years.

Mark Kelly, 51, and Rikki Nicholls, 57, were convicted on conspiracy to defraud and money laundering charges at Southwark Crown Court on 15 July.

The duo set up a sophisticated plan to persuade pension savers to transfer their pensions, which were then used for their gains.

The court heard that the victims, predominantly Equitable Life customers, were persuaded to sign application forms with blank sections that Kelly and Nicholls later completed.

This then allowed the advisers to take control of the pension funds, placing them into high-risk offshore investments that provided them with high rates of commission.  This enabled them to extract around 10% of the gross sum in unauthorised commission payments, making them more than £1m each.

A number of the funds subsequently collapsed, resulting in some of the pension holders losing substantial amounts.

TPO factsheet on approach to public service scheme age discrimination complaints

On 20 July 2022, TPO published a factsheet detailing its approach to age discrimination complaints in public service schemes following the McCloud judgment.

TPO recognises the Government is taking steps to address the discrimination and schemes that will need to change their administrative systems and provide detailed information to members about their options.

Presently therefore, TPO’s general starting position is that it will not investigate complaints or disputes relating to remedying age discrimination in public service schemes but will look at the facts for each case before making any decision.

They will still investigate where there are allegations of maladministration, such as failure to explain what is going on and engage properly with the member.

FCA failed to protect British Steel scheme members

The Financial Conduct Authority had “inadequate oversight” of companies involved in the British Steel Pension Scheme (BPSPS) transfer scandal. MPs claimed that it was “consistently behind the curve” when responding to issues.

A report by the Public Accounts Committee, looked at how the regulator handled the issue, the proposed redress scheme, and how the FCA is prepared for future risks.

The committee found that the FCA was “consistently behind the curve” and, despite being aware of the potential risks caused by pension freedoms introduced in 2015, it, “failed to take preventative action to protect consumers”.

It also accused the FCA of failing to protect BSPS members from “unscrupulous financial advisers” who were incentivised by existing fee structures and regulations to provide unsuitable advice, which led to around 7,800 steelworkers losing an average of £82,600 in life savings, with some losing up to £489,000.

FCA sets out proposals for calculating redress for British Steel workers

The FCA has set out proposals for calculating compensation for the BSPS redress scheme.

The proposals were published in a consultation looking to support members who opted out of defined benefit schemes following non-compliant advice.

The FCA stated, “We are seeking views on changes to our methodology for calculating redress for consumers who suffered financial loss from a defined benefit scheme to a defined contribution pension scheme following non-compliant advice”.

“Redress aims to put consumers back in the position they would have been in had they remained in their DB scheme”.

The consultation closed on 27 September 2022.

DWP Consultation on technical amendments to the PPF and Fraud Compensation Fund (“FCF”) Regulations

On 27 July 2022, the DWP published a consultation on two technical changes to the PPF and FRC regulations.  The changes are designed to:

  • Enable the PPF to make interim payments to cover scheme fees and costs which FCF claims are processed and
  • Change PPF provisions regarding child pensions so that a gap in full-time education of more than one year does not result in the loss of PPF compensation

The consultation closed on 9 September 2022.

TPR launches scam fighting plan

The Pensions Regulator (TPR) has launched an initiative to protect savers as inflation may leave them more vulnerable to scammers.

TPR is warning that savers may be lured by offers to access their pension savings early to cover essential household bills.

In the scams strategy, TPR say it will continue to improve the coordination of intelligence between scam-fighting partners to better disrupt and prevent fraud

The strategy follows a joint assessment of the threat from pensions scams carried out by TPA and the National Fraud Intelligence Bureau.


This Pensions Spotlight does not constitute advice, nor should it be taken as an authoritative statement of the law.

If you have any comments or queries about Pensions Spotlight, please contact your Equiniti Client Account Manager.

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