UK Public Service Pensions Update | September 2024
Published on 25th Sep 2024
Welcome to the latest edition of the UK Public Service Pensions Update
This month, we consider the Pensions Regulator's pensions dashboards compliance and enforcement policy and actions schemes need to take, the latest news in relation to the McCloud remedy, and a number of developments affecting the Local Government Pension Scheme and police pensions.
If you would like to discuss any of the items in this newsletter, please contact one of the experts listed at the end of the update.
Pensions dashboards | TPR urges schemes to 'act now so that we don't have to'
The Pensions Regulator has shared a blog post in which it reminds schemes what they need to do to prepare to connect to the dashboard architecture and confirms that it "will be engaging with hundreds of schemes this autumn, asking them to account for how they are measuring and improving their data [and] may take regulatory action where trustees or scheme managers are failing to meet our expectations."
The blog post publicises the release of the final version of the Pensions Regulator's pensions dashboards compliance and enforcement policy. This policy sets out the key risk areas the regulator will focus on, what the regulator expects schemes to do or to have done (including in the areas of governance and audit trails and record-keeping), how it will monitor compliance, and how it will respond to non-compliance. It also sets out a number of scenarios (for example, missing the connection deadline for your scheme) and says what action the regulator might take in each of those situations.
The "connect by date" for all public service pension schemes is just over a year away (31 October 2025). Funds should consider the blog post and the new compliance and enforcement policy and review their project plan for dashboard connection to ensure it is complete, up to date, and running to time.
Tax and economy | Budget Responsibility Act becomes law
In our last newsletter we reported that the chancellor of the exchequer, Rachel Reeves, had confirmed that she will "hold a Budget on October 30th alongside a full economic and fiscal forecast from the Office for Budget Responsibility".
With 30 October approaching, The Budget Responsibility Act 2024 has received Royal Assent and become law. The Budget Responsibility Act delivers on the Labour Party manifesto commitment to introduce a "‘fiscal lock’, requiring [a] fiscal event which makes significant and permanent changes to taxation or spending to be subject to an independent assessment by the Office for Budget Responsibility …[to] ensure there will always be scrutiny of the Government’s fiscal plans.” The fiscal lock is intended to avoid a repeat of the September 2022 “mini budget”. You can read more about the legislation here.
McCloud remedy | New and updated HMRC guidance
In a recent newsletter, HMRC confirms that its "calculate your public service pension adjustment service" is available to use again. The newsletter sets out the changes that have been made to the service, confirms what information schemes might need to provide to members and to HMRC, and lists a number of actions for scheme administrators. It is accompanied by an appendix containing guidance for members on tax on interest, an updated guide for members on how to use the "calculate your public service pension adjustment service", and updated guidance for schemes on how to calculate pension input amounts and how annual allowance charges are affected by the remedy.
McCloud remedy | Annual benefit statement exemption
New regulations have been made to relax the requirement for Local Government Pension Scheme (LGPS) administering authorities to include estimated calculations relating to the McCloud remedy in members’ annual benefit statements (ABSs) for the 2023/24 scheme year, and to give administering authorities the ability to determine that the McCloud remedy will not be reflected in ABSs for the 2024/25 scheme year.
LGPS | Payment of a death grant to a genealogy or tracing company
We have advised the Local Government Association (LGA) on whether LGPS administering authorities can pay a death grant to a genealogy or tracing company for onward payment to a potential beneficiary. The LGA has published the opinion on its website.
LGPS | Scheme Advisory Board statement on fiduciary duties and lobbying
The LGPS 2023-2024 has published a statement to provide guidance to LGPS administering authorities as they face "increasing levels and extreme forms of lobbying about how LGPS funds are invested".
LGPS | Call for evidence on asset pooling and investment
The government has invited feedback on a number of questions to inform the first phase of its pensions review (discussed in our August newsletter).The questions include several relating to the LGPS, and the call for evidence confirms that the answers the government receives to them will guide "stakeholder engagement with more targeted questions [then] being considered with particular stakeholder groups."
Police pensions | Employer contribution rate
Regulations have been made to allow the employer contribution to police pensions in England and Wales to be determined by the secretary of state on advice from the scheme actuary.
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.
