Pensions quarterly trustee update: Winter 2015/2016

Welcome to the Winter 2015/16 edition of Osborne Clarke’s quarterly trustee update, and wishing you all a very Happy New Year. 2016 promises to be another action-packed year for pensions, and in this update we take a look at the main developments to watch out for. We also summarise the latest pensions news of interest to trustees and all those involved with the pensions industry.

If you would like to discuss any of the content, or have a subject that you would like us to cover in next quarter’s edition, please let one of us know. Our contact details are set out below.

Best regards,

Jonathan Hazlett and Caroline Blackwood

2016: what’s on the pensions agenda, and a horizon tracker

We have a horizon tracker dedicated to pensions, which you can see here. Amongst the anticipated news this year, the pensions community is on tenterhooks to hear what the Chancellor George Osborne decides on the future of pensions tax relief, due to be announced in the Budget on 16 March 2016.  

The Pensions Minister, Baroness Altman, has set out her agenda in a parliamentary statement which you can read here.

Pensions tax: what has the Chancellor been up to now?

We urge readers to ensure that their schemes and members are ready for changes to the annual and lifetime allowances which will come into force from April 2016. Our post has the details, and steps that you need to consider taking. Read more.

Another tax issue that has been vexing pension schemes and employers is that of the VAT treatment of pension scheme services. We report on further guidance issued on this by HMRC. Read more.

Help: the Pensions Regulator has been issuing large quantities of new reading!

No need to panic, help is at hand.  Do read our summaries for analysis and highlights of the Pensions Regulator’s latest publications on the following:

• Guidance on integrated risk management. Read more.
• New draft Code of Practice for occupational defined contribution schemes. Read more.
• Reminder to insolvency practitioners faced with a defined benefit scheme. Read more.

Data protection, same sex survivor benefits and mistakes on pension increases: what have the courts been deciding on pensions?

The Court of Justice of the European Union has handed down a decision on data protection invalidating the EU-US Safe Harbor Framework on which many organisations have been relying safely to transfer data from the European Union to the United States. Our post covers the implications for pension schemes. Read more.

The Court of Appeal has heard an important case on the treatment of same sex survivor benefits in occupational pension schemes. Taking account of the applicable statutory provisions and relevant principles in EU law, it dismissed the appeal
from a member whose same sex spouse would receive a survivor’s pension of around £500 a year if the member died, rather than around £41,000 if that member had been married to a woman. Read more.

The High Court has heard a case concerning a mistake in the drafting of pension increase provisions in the scheme documents. In this case the mistake was held to be self-evident, and the drafting with the mistake did not make sense and was impossible to implement in practice. The trustees therefore used a particular route under section 48 of the Administration of Justice Act 1995 to obtain an order from the Court confirming how the scheme should be administered. Read more.

PPF round-up

The PPF has published the following:

• Its levy determination governing the calculation of levies for the 2016/17 levy year, which starts on 1 April 2016. Contingent assets need to be certified with the PPF by midnight on 31 March 2016.
• Guidance on the approach it will take to litigation by insolvency practitioners. Read more.
• Plans to re-invoice schemes for mistaken claims for last man standing discounts. Read more.

Autumn Statement: no surprises, but some pensions announcements to be aware of

The Chancellor’s Autumn Statement mercifully revealed no pensions surprises – these are being stored up for the Budget in March 2016 when the government’s decisions on any changes to pensions tax relief will be announced.

We nevertheless report on the tax and other pensions issues which were contained in the Autumn Statement. Read more.

What’s been happening in public sector pensions?

The government also used the 2015 Autumn Statement to further its plans to transform the LGPS by pooling the LGPS investments together into six British Wealth Funds, with the aim of driving investment into infrastructure and local growth. To facilitate this development the government is currently consulting on new LGPS investment regulations. Read more.

Two sets of draft regulations have been published on exit payments paid as part of a termination package to public sector employees. One concerns a cap on such payments, and another relates to allowing the recovery of exit payments made to public sector employees who return to work in the public sector. Read more.