Atkin trustees, actuaries, consultants & administrators

Current issues - October 2019

How good is your data? – TPR is watching: TPR has publicly confirmed that it has targeted 400 schemes that do not appear to have reviewed their data in the last 3 years with a further 800 being sent reminders. Schemes that have not reviewed their common and conditional data for some time should contact their administrators to put a plan in place.

For those schemes that are concerned about costs, the Trustees could consider carrying out the exercise themselves. This would require a data extract from the administrator (which I would expect to involve only a nominal charge, if anything at all) and we can provide support as to what checks need to be carried out.

Alternatively, the common and conditional data checks only look for the presence of data rather than whether it is correct and consistent with the Trust Deed and Rules. If schemes are required to carry out a data audit, it might be sensible to take the opportunity to carry out a more detailed review of the benefits and data. This exercise could be carried out by your existing administrators, or we are experienced at carrying out such exercises, which would then benefit from a fresh set of eyes. This will be particularly relevant for those schemes with GMP benefits who may already need to carry out substantive benefit rectification exercises.

If you are concerned about data issues, please get in touch.

Pensions Bill: The Queen’s speech announced the long awaited Pensions Bill. Although the ability of the existing Government to deliver such a bill is perhaps questionable, the expectation is that any future government, almost irrespective, of who forms it, is likely to implement a similar bill with only the timing being the unknown quantity. It is very much as expected with;

• the TPR being given greater powers

• certain corporate events will require companies to confirm that they have taken into account the impact on the pension scheme

• the pension’s dashboard will be going ahead

• changes will be made to the DB funding regime which is more likely to be on a 'comply or explain' basis

GMP Equalisation - Guidance: The first guidance paper has been issued on how to achieve GMP equalisation with more papers expected on other elements of the exercise before the end of the year (including guidance from HMRC on the tax treatment). The Lloyds pension trustees are also going back to court to obtain guidance on the treatment of past transfers the result of which is expected early 2020. Therefore, unless schemes have a good reason to carry out GMP equalisation now, it would appear sensible to wait.

CMA Order – Actions for Trustees: By 10th December, trustees must set objectives for their investment consultants and have measures in place to monitor against these. Objectives, which are likely to be linked to the scheme’s investment aims, must be set at least every 3 years. Guidance is expected from TPR to help trustees in setting appropriate objectives. Trustees should start discussions with their investment consultants now so that objectives and monitoring methods can be put in place in time.

We do not believe that this needs to be an expensive, complicated exercise and we can provide some generic objectives that you might use as a starting point.

Otherwise, the DWP has published a fact sheet about the changes it made recently to the information that trustees must disclose on their Statement of Investment Principles. https://www.gov.uk/government/publications/workplace-pension-scheme-shareholder-rights-directive-ii-fact-sheet/shareholder-rights-directive-ii-fact-sheet

PPF Levy consultation: The only significant change proposed to the PPF levy methodology for the 2020/21 levy year is confirmation that GMP equalisation should be being allowed for in any new s179 valuations. Otherwise, the continuing decline in gilt yields means that it is expected that there will be an average increase of 8% in the levy.

RPI and CPI – September figures released: These figures will be relevant to many schemes that base increases on the September figures in particular where schemes provide statutory increases

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I have worked with Atkin & Co for many years and with Angela Norman in particular. My experience is that they are very professional and well organised, demonstrating a high level of integrity in the work they do and the information that they supply. Always helpful, Atkin & Co adopt a pragmatic approach to resolving problems if they arise.

Peter Wilkes, Harben Barker