21st Century Trusteeship – new TPR campaign
The Regulator has launched its 21st Century Trusteeship campaign, aimed at raising standards of pension scheme governance. Rather than creating new or higher governance standards, the Regulator says that it is making clear what good governance looks like, and the action it will take if its expectations are not met.
The campaign will include direct communications to schemes and employers as well as new online guidance. The first block of guidance looks at the basics of good governance (including scheme returns, breach reports, levy payments, DB funding requirements, DC chair’s statements and trustee board governance self-reviews). It includes links to other publications by the Regulator, including a new ‘Quick guide to improving your data’ which sets out the Regulator’s expectations that trustees should develop and maintain data improvement plans, and monitor progress against those plans.
Transaction cost disclosure
Greater transparency for DC members in relation to transaction costs came a step closer this week. New regulations bring into force, with effect from 18 September 2017, provisions requiring the Secretary of State to make regulations requiring the disclosure to members of information about transaction costs imposed on DC schemes. Similar obligations apply to the Financial Conduct Authority in relation to personal pension schemes.
Separately, the FCA has issued a policy statement setting out a new requirement for asset managers to disclose aggregate transaction costs to pension schemes that invest in their funds (directly or indirectly) – this will support trustees in their duty to report on transaction costs.
From 3 January 2018, the FCA’s Handbook rules will require asset managers to provide information about transaction costs (calculated on a standardised basis), together with information about administration charges and appropriate contextual information, on request from the governance body of a DC workplace pension scheme. Asset managers will also be required to provide a breakdown of the transaction costs, on request, with the total broken down into categories of identifiable costs (including, for example, taxes and securities lending costs).
Countdown bulletin 27
HMRC’s latest Countdown bulletin includes a reminder that schemes can request a re-run of SRS data, which would now include active members (that is, those who were still in contracted-out service as at 6 April 2016). As noted in our recent GMP briefing, the closure scan data provided by HMRC will not automatically pick up members who became deferred after the effective date of the first data scan provided for your scheme under the Scheme Reconciliation Service, but before the abolition date. Schemes can ask for a rerun of SRS data including members who left service during this period, or raise separate queries about the data for these members.
Changes to FAS compensation
The DWP is consulting on regulations to increase the Financial Assistance Scheme compensation cap for members with long pensionable service, along similar lines to the long-service cap which now applies to Pension Protection Fund compensation.
The consultation closes on 25 October 2017; the government expects the revised cap to be implemented in April 2018.
HMRC LA guidance for administrators
HMRC has updated its guidance for scheme administrators on lifetime allowance protections, to cover the new look-up service which enables administrators to check whether scheme members have valid lifetime allowance protection.