Pensions Planner - September 2018

Your guide to future developments

Pensions regulation never stands still.

This summer has seen a raft of new consultations, including:

• DWP's consultations on proposals to strengthen the powers of the Pensions Regulator and on clarifying and strengthening the investment duties of pension scheme trustees
• a consultation on the proposed remedies resulting from the FCA's Retirement Outcomes Review, and
• HM Treasury's consultation on the details of the long-awaited ban on pension cold-calling.

At the same time as proposals are being developed to strengthen the regulatory oversight of DB pension schemes, there is evidence of the Pensions Regulator flexing its existing muscles. The Regulator's recent warning letter to underfunded schemes that it perceives are paying overly generous transfer values is an example of this. As is its more interventionist approach in funding negotiations.

De-risking activity in the first half of the year has been at record levels as schemes and sponsors look to take advantage of improved funding positions and increased market capacity.

The summer has also seen a number of important judgments, most notably, in:

• British Airways v Airways Pension Trustees Ltd, in which the trustee was held to have exercised the scheme's amendment power for an "improper purpose", and
• G4S Plc v G4S Trustees Limited, in which the High Court held that a scheme that was closed to future accrual but where employed members retain a final salary link was a "frozen scheme" for the purposes of the employer debt regime.

This latter judgment came as a relief to many corporate groups with closed DB schemes.

The threat of pension scams continues to be highlighted with the Pensions Regulator and the FCA launching a new TV advertising campaign. The Ombudsman's recent decision to require the Northumbria Pension Authority to reinstate the benefits (worth over £100,000) of a member who was the victim of a pension scam, serves as a reminder of the need for trustees and providers to keep pace with industry best practice in this area.

The Competition and Markets Authority published its Provisional Decision following its investigation into the operation of the investment consultancy and fiduciary management markets, setting out remedies to address deficiencies on the demand side in both markets.

The ongoing negotiations over the UK's exit from the European Union (both within the Cabinet itself and with EU negotiators) continue to dominate the headlines. Uncertainty remains over what, if anything, will ultimately be agreed and the scene is set for some significant showdowns in the Autumn.

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