Pensions timeline – what’s on the horizon?

Written on 24 Mar 2016

Abolition of contracting-out and
creation of new single-tier state pension
A new single-tier state pension will be
introduced from April 2016. At the same time DB contracting out will be
abolished. Employers and trustees of affected schemes should now be
implementing actions they wish to take as a result. See our posts on this issue
for further details – The
abolition of DB contracting-out – is your scheme prepared?
 and Abolition
of DB contracting-out – your questions answered
and Abolition
of DB contracting-out: actions to take as the final countdown approaches
.
Payments of surplus funds to the employer Where a DB scheme has a power in the trust deed
and rules allowing payment of surplus funds back to employers, section 251 of
the Pensions Act 2004 requires a trustee resolution to be passed before 6
April 2016 to retain that power. Three months’ notice must be given to scheme
members and the employer(s) before the resolution is passed, so this process
must have started by 5 January 2016. See our post for
further details.
Tax changes From 6 April 2016 the Lifetime Allowance will be
reduced from £1.25m to £1m, and transitional protections introduced. The
annual allowance will be tapered for high earners. In most cases lump-sum
death benefits will be taxed at the recipient’s marginal rate if the member
dies after reaching age 75. See our post for
further details.
Finance Bill 2016 This was published on 24 March 2016. Its main pensions provisions include the reduction in the Lifetime Allowance to £1 million from 6 April 2016 and associated transitional protections, a change to the inheritance tax treatment of drawdown pensions, simplification of the tests that apply when a dependant’s scheme pension is paid, and alignment of the legislation covering the payment of bridging pensions with the introduction of the single-tier state pension in April 2016.
Charges in DC schemes From 6 April 2016 providers of workplace DC
schemes will be banned from levying commission or other charges for advice
that is not initiated by members. They will also be banned from levying
differential charges for different categories of members (such as active
member discounts).
New DC Code of Practice The Pensions Regulator has issued a draft Code of Practice on the governance of occupational DC schemes. The consultation has closed and the Code is expected to come into force the spring/summer of 2016.
LGPS British Wealth Funds The government expects LGPS funds to submit refined and completed pooling submissions fully addressing the published criteria by 15 July 2016. See our update for further details.
Consultation on secondary market for annuities The government has published a response to its consultation on this, with more details about the market and consumer protections. See our post for further details. There will be further consultations and pieces of regulation designed to enable the new market coming out in 2016.
Financial advice The FCA is leading a review of financial advice
markets. A call for input has been issued by the FCA and Treasury jointly,
and the Treasury has also issued a consultation paper on publicly funded
guidance such as TPAS and Pension Wise. We will hear more on this in 2016.
Brewster v Northern Ireland LGPS The Supreme Court has granted permission for an
appeal in this case concerning the benefits awarded on the death of a member
of the LGPS to his surviving unmarried partner. No date has yet been fixed
for a hearing.
Walker v Innospec               An appeal in this case concerning survivor’s
pension benefits for same sex civil partners or spouses was dismissed by the
Court of Appeal. The Court of Appeal refused permission to appeal to the
Supreme Court, but we await to hear whether the parties will appeal directly
to the Supreme Court.  See our update
for details of the Court of Appeal decision.
Hampshire v the Board of the PPF This decision concerns the minimum level of
compensation that the PPF must provide. The member is arguing in broad terms
that EU law requires that PPF compensation should be at least 50% of the
member’s pension benefits. This is being appealed to the Court of Appeal.
Horton v Henry This High Court case found that an income payment
order could not be made against a bankrupt person’s undrawn pension. This
decision was the opposite of that in another High Court case, Raithatha.
It is being appealed and is due to be heard in January 2016.
Briggs v Gleeds & ors This decision about a series of deeds of
amendment that were invalidly executed over 20 years is being appealed to the
Court of Appeal.
IBM UK Holdings Ltd v Dalgleish Leave to appeal the High Court judgments on
breach and remedies has been granted. The appeal is expected to be heard in
early 2016.
Heis v MF Global UK Services Ltd This case concerns where responsibility for a
section 75 debt lies in relation to pension liabilities for employees
seconded from a service company to another group company. An appeal is due to
be heard in May 2016.
Buckinghamsire v Barnados Another case considering the vexed question of
whether the trustees have the power to switch from using RPI to CPI for
revaluing deferred pensions and indexing pensions in payment. The High
Court’s decision that the trustees’ could not switch is to be appealed to the
Court of Appeal in 2016.