UK Public Service Pensions Update | August 2023
Published on 23rd Aug 2023
Welcome to the latest edition of the UK Public Service Pensions Update.
With many taking a summer break, this month's newsletter is a short one. We highlight our new webinar series on the Procurement Act 2023 and some other recent developments.
If you would like to discuss any of the items in this newsletter, please contact one of the experts listed at the end.
Procurement Act 2023 | New webinar series
The Procurement Bill is expected to be enacted in the coming weeks and will herald a period of change for public procurement. The new regime unifies public, utilities and defence procurement into one act and features a number of important changes from the current regulations.
Starting in September, our procurement team will be running a series of events on these upcoming changes, including webinars on how supplier performance will be monitored under public contracts (and what happens if performance is not up to scratch), transparency, and bringing procurement challenges under the new regime. You can find out more and sign up to the webinars on our dedicated webpage.
McCloud remedy | Pensions tax
In our June 2023 newsletter, we reported that HMRC had published a newsletter on the McCloud remedy and had consulted on a second set of regulations concerned with how the pensions tax rules will apply in the context of that remedy. We also reported that guidance on the regulations had been added to the consultation page on 26 June.
The regulations (The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No. 2) Regulations 2023) have now been made and will come into force on 14 September 2023. HMRC has also published another newsletter, to explain the changes made to the draft regulations following consultation.
McCloud remedy | Civil Service Pension Scheme
In our March 2023 newsletter, we reported that a number of departments including the Cabinet Office were consulting on draft regulations to be made under the Public Service Pensions and Judicial Offices Act 2022 in order to implement the retrospective part of the McCloud remedy: allowing members to choose between legacy scheme and reformed scheme benefits for remediable service between 1 April 2015 and 31 March 2022.
The Cabinet Office has now published the consultation response in relation to the Civil Service Pension Scheme. The proposed regulations are expected to be laid in Parliament early in September to become effective from 1 October 2023.
McCloud remedy | Teachers' Pension Scheme
In our April 2023 newsletter, we reported that the Department for Education was consulting on proposed changes to the Teachers' Pension Scheme regulations to implement the retrospective part of the McCloud remedy: allowing members to choose between legacy scheme and reformed scheme benefits for remediable service between 1 April 2015 and 31 March 2022
The DfE has now published the government's response to the consultation. The Teachers' Pension Scheme (Remediable Service) Regulations 2023 have been made and will come into force on 1 October 2023.
All funds | Other developments
Funds should also be aware of developments relating to pensions dashboards, pensions scams and artificial intelligence.
Funds are waiting for guidance on updated timings for connecting to the pensions dashboard infrastructure. In the meantime, the Department for Work and Pensions has updated its guidance on deferred connection. The updated guidance confirms that the latest date for making an application to defer connection would be 8 August 2024. It also confirms that the Department for Work and Pensions will contact applicants to clarify the status of any application to defer made before 9 August 2023.
Funds might be interested to read an evidence review of pension scams in the UK released by the Money and Pensions Service. Among other things, this suggests that future risk points for scams might include "when the minimum age to access pensions increases from 55 to 57 in 2028 and the exploitation of the new pension dashboard as pension savers become aware of their smaller pots and might share this information with the scammers".
The rise of AI
Artificial intelligence (AI) and, in particular, generative AI (which can create text content which is often difficult to distinguish from that created by humans), is on the rise. Funds might like to read our overview of the legal and compliance risks that AI can give rise to.
Other developments | Pensions Action Plan Q4 2023
We have released our Q4 2023 Pensions Action Plan. Each action plan is a summary of changes and proposals in pensions law and regulation over the last quarter, most of which are also relevant to public sector pension schemes.
Topics covered include:
- Cyber security
- Review of and guidance on the 2021 Transfer Regulations
- The Work and Pensions Committee's report on liability-driven investment
- The pensions aspects of the chancellor of the exchequer's recent Mansion House speech
- Draft legislation to remove the lifetime allowance
To receive your copy of the Action Plan, please ask your usual Osborne Clarke contact.
House of Commons Library briefing papers | New and updated
The House of Commons library has published or updated the following briefing papers, which might be of interest to public service pension schemes and employers:
This newsletter covers developments relating to public service pensions in England and Wales, with a focus on the Local Government Pension Scheme.