With legislative changes having been put on hold pending the general election, this edition focuses on a series of developments that have been able to proceed without parliamentary time. These range from an update on the McCloud case to a temporary annual allowance solution for the NHS pension scheme.
If you would like to discuss any of the developments in this newsletter, please contact one of the experts listed below.
Update | The McCloud case
On 15 November 2019, the Local Government Pension Scheme Advisory Board published an update on the McCloud case. The update looks at how the case is likely to affect the Local Government Pension Scheme and at steps administering authorities should take now. It also considers how the McCloud case is likely to affect other public sector pension schemes.
Update | Investment: CMA's final order
The Pensions Regulator has published the response to its consultation on draft guidance for trustees and managers on how to meet main obligations under the Competition and Markets Authority's final order in its investigation into competition in the investment consultancy and fiduciary management markets. The consultation response is accompanied by final guidance on setting strategic objectives for investment consultants, choosing an investment governance model, and running a competitive tender for investment consultancy or fiduciary management services.
The guidance on setting strategic objectives for investment consultants specifically confirms that it applies to those responsible for Local Government Pension Schemes.
The consultation response confirms that there are some differences between the CMA's final order and the draft regulations put forward by the Department for Work and Pensions, including in the area of setting strategic objectives for investment consultants, and that the guidance will be updated when the DWP regulations come into force.
Governance | Transfers
The Pensions Regulator has updated paragraphs 36 onwards of its DB to DC transfers and conversions guidance to confirm what schemes must do, from 9 December 2019, to check that a financial adviser has the necessary permissions in transfer cases where the financial advice requirement applies. The required checks were changed on 9 December because this was the date on which the Financial Conduct Authority replaced its Approved Persons Regime with the Senior Managers and Certification Regime.
Pensions Ombudsman | Survivor benefits and ill health pensions
The Pensions Ombudsman has issued three recent decisions of interest relating to the Local Government Pension Scheme.
In the first, the Pensions Ombudsman rejected a complaint by a surviving co-habiting partner who was expecting to receive a death grant and had been incorrectly told, after her partner had died, that she would receive a survivor's pension.
In the second, the Pensions Ombudsman rejected a complaint by a deferred member who had applied for an ill health pension. The case was complicated by conflicting medical evidence and the fact that the member's health had not improved as anticipated.
In the third, the Pensions Ombudsman rejected a complaint by a member who had resigned from employment and claimed that they should be treated as an active member, for the purposes of their application for an ill-health pension, because they were constructively dismissed.
NHS Pension Scheme | Temporary annual allowance solution
The General Election has stalled progress in finding a long-term solution to the impact that the tapered annual allowance is having on the NHS. To try and protect patient care over the winter, the Secretary of State for Health and Social Care has agreed a temporary solution with NHS England for 2019/20. The temporary solution is that clinicians use scheme pays to meet any annual allowance charge on the understanding that, when they retire, they will be compensated for the reduction in their pension by an employer payment outside of the NHS Pension Scheme. The Secretary of State has issued an assurance in relation to the employer payment and a separate solution will apply in Scotland.
Teachers' Pension Scheme | Employer contributions
On 2 December 2019, the Department for Education and the Education and Skills Funding Agency published guidance for schools and guidance for further education providers on how the cost of increased employer contributions to the Teachers' Pension Scheme will be met.