Consultations on a few issues have taken place or commenced over the past quarter.
Government consults on various contracting-out issues including equalisation of GMPs
The Government has published a consultation on various matters relating to contracting-out, including a proposed methodology for equalising GMPs.
HM Treasury consultation on pensions advice allowance
HM Treasury has consulted on introducing a "Pensions Advice Allowance" which would allow members to take £500 tax free from their money purchase scheme to redeem against the cost of financial advice. The consultation closed on 25 October 2016.
Draft PPF Levy Determination 2017/18
On 22 September 2016, the PPF published its consultation and draft determination for the 2017/18 levy. The PPF is not proposing major policy changes for the forthcoming levy year. One area of concern raised by the PPF is schemes that run on outside the PPF with a shell company or "special purpose vehicle" as sponsoring employer. Separately, one change which the PPF is making is to allow certain employers that are moving to the FRS 102 accounting standard for the first time (primarily likely to be unlisted entities) to make submissions to the PPF by 31 March 2017 to avoid their insolvency risk scores being adversely affected by certain elements of the new accounting standard.
The consultation closed on 31 October 2016.
DWP Consultation on increase to PPF compensation cap for members with long service
The DWP has consulted on regulations relating to its plans to increase the PPF compensation cap applicable to members with long pensionable service. Broadly, the compensation cap will increase by 3% for each year of pensionable service a member has in excess of 20 years (subject to 2 times the cap). The consultation closed on 9 November 2016, and the Government intends to bring the measures into force in April 2017.
DWP consults on "appropriate independent advice" requirement re GARs and re overseas transfers
The DWP has consulted on draft regulations dealing with how to value benefits with a guaranteed annuity rate (GAR) for the purposes of ascertaining whether the value of the benefits is over £30,000 (the threshold which triggers a requirement for the member to take "appropriate independent advice" before transferring benefits to a money purchase arrangement). The consultation closed on 7 November 2016. The DWP has also published a call for evidence on how transfers overseas have been affected by the advice requirement and how the requirement could be made to work better in relation to overseas transfers. That consultation closes on 23 December 2016.
DWP consults on General Levy rates
The DWP is consulting on the rate of the General Levy, which is used for the core funding of the Pensions Regulator, TPAS and the Pensions Ombudsman (not to be confused with the PPF levy). It proposes a freeze in the levy rate for schemes with less than 500,000 members and a reduction in the levy rate for schemes with 500,000+ members. The consultation ends on 18 January 2017.
FCA consults on measures to improve disclosure of transaction costs
The FCA has published a consultation proposing rules and guidance to improve the disclosure by asset managers of transaction costs in workplace pensions. It sets out standards to enable trustees to obtain, for the first time, a standardised disclosure of the transaction costs that pension investments incur. The consultation closes on 4 January 2017.
FCA consults on requirements for annuity providers to illustrate potential gains of shopping around
The FCA is consulting on new measures to require annuity providers to provide annuity quotes in a personalised format which will illustrate to the individual member how much he or she could potentially gain by shopping around for an annuity. The consultation closes on 24 February 2017.
HMRC consults on new provision of information requirements re lump sum death benefits
HMRC is consulting on draft regulations which will impose new requirements on scheme administrators to provide information when paying taxable lump sum death benefits to a trust. The information will include the amount of the lump sum on which tax has been charged, the amount of the tax charge, and various details of the scheme and the deceased member. The trustees of the trust will then have to provide the recipient of a payment from the trust with the amount the recipient has to declare for income tax purposes and the amount of tax paid by the pension scheme administrator. The beneficiary can then use the information to claim a refund. The closing date for comments on the draft regulations is 5 December 2016.