What happened in pensions in 2017: Part One

James Phillips
clock
What happened in pensions in 2017: Part One

This year has been a big year for the pensions industry. In a four-part review of 2017, James Phillips looks at what happened between January and March this year.

January

1 January - The New Year's Honours list sees former pensions minister Steve Webb receive a knighthood, while The Pensions Regulator's (TPR) then-executive director automatic enrolment (AE) Charles Counsell and actuary Andrew Young are made OBEs.

Webb is praised for his work on AE and the state pension triple lock, Counsell receives his award for services to workplace pension reform, and Young for services to pension policy and pensioners.

4 January - The Treasury is lambasted for failing to mention pensions in a ‘Ways to Save' poster, while including information on various ISAs and bonds, including the Lifetime ISA.

The 2016 version had included Freedom and Choice, causing some critics to say it looked as if "they've completely forgotten about pensions".

5 January - Royal Mail launches a formal consultation on the closure of its defined benefit (DB) scheme, beginning a saga that has spanned the whole year.

9 January - For the first time, TPR fines four master trusts for failing to submit a chair's statement.

The trustees of the Nurture Master Trust, Save and Prosper Personal Retirement Account, Save and Prosper Company Pension Scheme, and Save and Prosper Personal Retirement Account Simplified Pension Scheme received £5,020 in fines between them.

12 January - In a unique deal, the CovPress pension scheme avoids the Pension Protection Fund (PPF) after the company was acquired by Liberty House, which agreed to take on responsibility for the scheme.

12 January - The Administrative Court sides with TPR in a case questioning its use of anti-avoidance powers for the Silentnight pension scheme.

The court disagreed with the scheme's private equity group owner HIG Group that a warning notice issued by TPR warranted a judicial review.

17 January - The Employment Tribunal rules that the Ministry of Justice (MoJ) had discriminated against younger judges when implementing changes to its DB scheme.

The MoJ had forced younger judges to leave the scheme while allowing those within 10 years of pensionable to remain members.

17 January - The Consumer Prices Index (CPI) hits a two-year high of 1.6% on the back of falls in sterling following the Brexit vote. It would only go on to increase from there.

19 January - The British Steel Pension Scheme (BSPS) trustees reject a bid by the former London Pension Fund Authority (LPFA) chairman Edmund Truell for two of his organisations to run the scheme.

27 January - Unite, GMB and Community urge BSPS members to accept Tata Steel UK's proposals to replace the DB scheme with a defined contribution (DC) arrangement.

 

February

2 February - TPR warns that employers which shirk their AE duties could see their credit ratings hit if they receive County Court Judgements (CCJs). Three employers had received CCJs at the time of reporting.

6 February - The Treasury announces that a soon-to-be implemented Pensions Advice Allowance (PAA) would be tripled from £500 to £1,500 for DC savers.

8 February - The Department for Work and Pensions (DWP) confirms The People's Pension's then-trustee director Ruston Smith, Standard Life head of pensions Jamie Jenkins, and Pensions Policy Institute (PPI) director Chris Curry would head up the AE review.

Smith has led on engagement, Jenkins on coverage, and Curry on contributions.

8 February - The Supreme Court rules death benefits should be granted to surviving partners of unmarried couples, even if that person hasn't been nominated.

13 February - The Court of Appeal tells Pimlico Plumbers it must provide its gig economy workers with their statutory rights, including a workplace pension.

15 February - The Treasury confirms it will go ahead with cutting the money purchase annual allowance (MPAA) from £10,000 to £4,000 from April in a move described as "damaging trust" in pensions.

15 February - Seven in ten BSPS members accept Tata Steel's proposal to shut the DB scheme and replace it with a DC arrangement.

16 February - The Employment Tribunal dismisses claims that the Home Office discriminated against younger firefighters when introducing transitional arrangements for the Firefighters Pension Scheme.

20 February - The DWP unveils its green paper on the security and sustainability of DB schemes, stating there was no systemic issue.

The department hints it may allow for conditional indexation for "stressed" schemes and says it is considering further powers for TPR.

21 February - The PPF launches a consultation on introducing a new levy for schemes without a substantive sponsor.

24 February - Mercer, Willis Towers Watson and Aon Hewitt propose a package of reforms to address the Financial Conduct Authority's (FCA) concerns about the investment consultant market.

28 February - The Treasury announces it will change the definition of financial advice for regulated firms from 3 January 2018 to become aligned with the Markets in Financial Instruments Directive (MiFID).

28 February - TPR and Sir Philip Green agree a £363m deal over the British Home Stores (BHS) pension schemes ending the watchdog's anti-avoidance action.

Under the deal, members were given the option to either transfer to a new pension scheme, opt to take a lump sum, or transfer into the PPF.

 

March

2 March - The DWP decides it will not allow the National Employment Savings Trust (NEST) to offer flexible hybrid decumulation products, stating there was "limited evidence" suitable products were available.

2 March - TPR launches spot checks across the nation to check for ongoing AE compliance.

7 March - The Pensions and Lifetime Savings Association's (PLSA) DB taskforce calls for DB schemes to merge into single-sponsor ‘superfunds' backed by insurer or investor capital.

Employers would be able to pay a fee to cut ties with their pension scheme, while consolidated benefits would be standardised.

8 March - At Spring Budget 2017, chancellor Philip Hammond announces pension freedoms had raised £1.7bn more in tax than anticipated.

He also announces plans to align the tax regime between foreign and UK schemes, while master trust tax registration would be aligned with the upcoming authorisation process. Meanwhile, he again reaffirms the decision to cut the MPAA.

15 March - The Communication Workers Union (CWU) responds to Royal Mail's plans to close its DB scheme with a "compromise" risk-sharing scheme.

The scheme would merge DB and DC members into a single fund which would guarantee a minimum wage in retirement.

22 March - Then Treasury financial secretary Jane Ellison rules out any changes to tax relief in the short-term, as well as deciding against an independent pensions commission.

23 March - John Cridland publishes his much-anticipated review of the state pension age, arguing it should rise to 68 between 2037 and 2039, 20 years earlier than previously planned.

He also calls for the state pension triple lock to be abolished, while for savers to be given a "mid-life MOT".

29 March - The Local Government Pension Scheme (LGPS) launches a new framework for measuring and disclosing investment performance, costs and charges.

31 March - The PPF confirms a new levy rule for sponsorless schemes, using a pricing model for options rather than the sponsor's insolvency risk to calculate the levy.

More on Law and Regulation

The firm said it is leading to more employers considering sole trusteeship by professional trustees

Regulatory overload stopping trustee roles being filled

ACA said 76% of employers expect trustees to consider resigning due to regulatory change

Holly Roach
clock 22 November 2021 • 2 min read
Plan to scrap Bauer judgment raises 'serious issues'

Plan to scrap Bauer judgment raises 'serious issues'

The DWP is planning on removing the effects of the judgment from retained EU law

Holly Roach
clock 17 November 2021 • 2 min read
Anna Rogers is senior partner at Arc Pensions Law

Indemnity: Why trustees need to be more risk averse

Sole corporate trustees don’t provide full protection and insurance hard to find

Anna Rogers
clock 16 November 2021 • 4 min read