Gowling WLG's Pensions experts discuss the latest developments.NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.
PI30P 16 - Scheme modification - overview03/08/2017 Duración: 07min
Key points Amendment or modification powers generally are found in scheme rules not in pensions legislation Pensions legislation restricts the way a scheme's modification power can be used Pensions Act 1995: Section 67 onwards protects accrued rights to pension benefits Section 67 also restricts the way changes can be made from defined benefit or final salary benefits to defined contribution or money purchase benefits Section 67 also restricts the way changes can be made which might reduce the rate of a pension Trust law requires trustees to act in members' interests and this applies to decisions to agree to scheme modifications Section 68 Pensions Act 1995 provides a statutory power to make specific modifications regardless of the powers contained in the scheme rules Additional considerations arise where the scheme is contracted out and section 37 of the Pension Schemes Act 1993 imposes additional formalities in such cases
PI30P 15 - The Pension Protection Fund01/08/2017 Duración: 11min
Key Points The Pension Protection Fund (PPF) provides compensation for members of defined benefit (DB) pension schemes whose sponsoring employers have become insolvent. It was established by the Pensions Act 2004. To qualify for entry to the PPF a scheme must be an eligible scheme. The Pension Protection Fund (Entry Rules) Regulations 2005 detail schemes that are not eligible. PPF entry is more complex for multi-employer schemes. The process will depend on the scheme's rules and whether or not the scheme is sectionalised or segregated (for example, on the insolvency of an employer). Detail is provided in the Pension Protection Fund (Multi-Employer Scheme)(Modification) Regulations 2005. The PPF is funded through levies on eligible DB schemes. If a scheme enters the PPF, the PPF will provide compensation to the scheme's members in place of their accrued pension. This compensation is subject to a cap which (usually) increases slightly each year.
PI30P 14 - Underfunded schemes - insolvent employers27/07/2017 Duración: 05min
Key points Independent trustee of pension scheme may be appointed Other trustees' discretionary powers fall away Employer as sole trustee ceases to act Employer debt: Section 75 Pensions Act 1995 and Occupational Pension Scheme (Employer Debt) Regulations 2005 may apply Scheme may qualify for entry to Pension Protection Fund under Pensions Act 2004 Section 126 onwards Trustees will be unsecured creditors in employer's winding up unless they have previously obtained security (such as a charge over assets)
PI30P 13 - Managing pension scheme liabilities25/07/2017 Duración: 13min
Key Points Options range from amending benefits to sophisticated investments The employer needs to consider its duty of good faith RPI/CPI
PI30P 12 - Ongoing scheme funding - refunds of surplus to employer20/07/2017 Duración: 08min
Key points There are circumstances in which a defined benefit pension scheme may have a funding surplus. Refund of surplus to an employer is permitted if certain requirements are met, which differ depending on whether the scheme is ongoing or in wind-up. The requirements include: Ongoing scheme: power in the rules, refund within limit specified by actuary, in members’ interests to exercise power, 3 months’ notice to members. Scheme in wind-up: power in the rules, scheme liabilities fully discharged, any power to pay surplus to others considered, 3 months’ notice to members. Section 251 of the Pensions Act 2004 provides that, for an ongoing scheme, the refund or surplus power is lost unless the Trustees pass a resolution meeting the requirements of section 251 to retain the power by 5 April 2016. In practice, this means Trustees must have given written notice of their intention to make such a resolution to members and employers by 4 January 2016. Under the Finance Act 2004, a refund of surplus payme
PI30P 11 - Ongoing scheme funding - internationally mobile workers18/07/2017 Duración: 18min
Key Points There are no statutory restrictions on membership of a UK pension scheme by persons who do not live or work in the United Kingdom. Restrictions on benefits accrued or provided under a registered pension scheme may be relaxed where a member does not benefit from UK tax relief because he or she is a "relevant overseas individual" or a transfer has been made into the scheme from a "recognised overseas pension scheme". A registered pension scheme may only make a transfer into an overseas pension scheme that is approved for the purpose by HMRC (a "qualifying recognised overseas pension scheme" - QROPS). Transfers to a QROPS (and onwards from a QROPS to another QROPS) are subject to the Overseas Transfer Charge (OTC) of 25% of the transferred value from 9 March 2017, unless certain exemptions apply. A member who comes to the UK as an existing member of a qualifying overseas pension scheme may benefit from migrant member relief on UK income tax. A scheme may only accept contributions from a "European Emp
PI30P 10 - Ongoing scheme funding - contingent assets13/07/2017 Duración: 07min
Key Points Contingent assets are additional employer or group assets that trustees can access on the happening of a specific event or events Examples of contingent assets are guarantees, charges and letters of credit Contingent assets may be used to give increased flexibility in terms of the approach taken to scheme funding by employers and trustees or to give trustees greater comfort as to the security of the pension scheme Trustees need professional advice before agreeing to accept a contingent asset so they can be satisfied that the contingent asset is validly given and can be enforced by them if the contingent event occurs The PPF has standard form documents for some types of contingent assets
PI30P 09 - Ongoing scheme funding - contribution obligation when employer departs from scheme11/07/2017 Duración: 05min
Key points Ceasing to employ active members in a defined benefit pension scheme at a time when another employer continues to employ active members into that scheme can trigger a potentially crippling debt. There are various mechanisms which can be deployed to avoid the effects of this lawfully. These should be considered before the debt is triggered.
PI30P 08 - Ongoing scheme funding - overview06/07/2017 Duración: 10min
Key points Most defined benefit pension schemes are funded through a combination of employer contributions and investment returns, although the requirement for member contributions is increasing Rules exist that seek to ensure that pension schemes will be able to afford to pay member benefits when they fall due Pension schemes have an ongoing "statutory funding objective" to have sufficient and appropriate assets to cover their technical provisions (i.e. the actuarially-assessed value of each scheme's liabilities) Pension schemes must undergo an actuarial valuation every three years in accordance with section 224 of the Pensions Act 2004 Trustees must put in place various documents as part of an actuarial valuation, including a statement of funding principles (section 223 of the Pensions Act 2004), a recovery plan (section 226 of the Pensions Act 2004) and a schedule of contributions (section 227 of the Pensions Act 2004)
PI30P 07 - The Pensions Regulator - powers to protect pension schemes04/07/2017 Duración: 08min
Key Points The Pensions Regulator's (TPR) anti-avoidance powers include contribution notices and financial support directions. They can be used if employers fail to support a scheme, cause material detriment to the chances of a person receiving benefits or the employer is insufficiently resourced or is a service company. Advance clearance is possible for specific transactions. TPR regularly publishes reports on the considerations it gives to the exercise of its powers and functions.
PI30P 06 - The Pensions Regulator - Notifiable events29/06/2017 Duración: 06min
Key points Employers and trustees have a statutory duty to notify the Pensions Regulator if certain prescribed events occur in an occupational pension scheme. Some prescribed events do not have to be notified if certain conditions are met e.g. if the scheme is fully funded on the PPF basis. If an event occurs it must be notified in writing to the Pensions Regulator as soon as reasonably practicable. Civil penalties can be imposed for non-compliance.
PI30P 05 - The Pensions Regulator- duty to report breaches of the law27/06/2017 Duración: 08min
Key Points Trustees, managers, administrators, participating employers, professional advisers and those otherwise involved in advising trustees are under a duty to report breaches of the law. It is essential that companies put in place procedures to comply with the Pension Regulator's Code of Practice on reporting breaches of the law. Trustees must bear in mind the need to act within the powers and responsibilities afforded to them in the trust deed and rules. When deciding whether to report, two points arise: (a) has there been a breach of law and (b) is it of material significance to The Pensions Regulator? It is important to have a reporting system in place and to be aware that one party's report does not automatically remove the duty from another party to report the same breach. The Pensions Regulator has the power to impose fines and report advisors to their professional governing bodies if they fail to report materially significant breaches.
PI30P 04 - The Pensions Regulator - overview22/06/2017 Duración: 07min
Key Points TPR has statutory objectives which include protecting pension scheme members' benefits TPR has a broad range of investigative, remedial and anti-avoidance statutory powers TPR's stated approach is to educate, enable and enforce TPR regularly publishes reports on the considerations given by it to the exercise of its powers and functions
PI30P 03 - Workplace pension reform and automatic enrolment20/06/2017 Duración: 13min
Key Points Anyone who employs workers in the UK will have to comply with new employer duties with effect from their 'staging date'; An employer's 'staging date' is set out in legislation and falls between 1 October 2012 and 1 February 2018 depending on how many people work for the employer; Employer duties are to: assess and categorise their workers; automatically enrol any workers who meet the criteria to be 'eligible jobholders'; and are not members of a 'qualifying scheme' into an 'automatic enrolment scheme'; issue communications to all workers including certain prescribed information; process opt-in and opt-out requests; pay contributions for jobholders in pension savings in line with statutory minima; and provide The Pensions Regulator with a confirmation of how they have complied with their duties.
The General Data Protection Regulation (GDPR) and pensions19/06/2017 Duración: 33min
The pensions industry has one year to prepare for new regulations coming its way. Europe's new data protection legal framework is set out in the General Data Protection Regulation (GDPR) which will come into force in all EU Member States on 25 May 2018, including the UK. While the changes are not radically different to the current legal requirements, there are important developments that the pensions industry needs to be aware of ahead of May 2018.
Pensions legal update - May 201716/06/2017 Duración: 27min
Every quarter, the Gowling WLG pensions team prepare a legal update covering the most relevant issues and developments for trustees and employers. The update covers new legislation, regulatory changes, pensions taxation and administration, scheme governance, investment and funding and pension cases and Ombudsman determinations.
PI30P 02 - Contracting-out of the State Second Pension15/06/2017 Duración: 06min
Key points Prior to 6 April 2016, an occupational pension scheme could contract out of the Additional State Pension on a defined benefit (DB) basis. Prior to 6 April 2012, an occupational or a personal pension scheme could contract out of the Additional State Pension on a defined contribution (DC) basis. In a contracted-out scheme, the member and his employer paid a lower rate of National Insurance contributions. The member receives an amount of pension from their contracted-out scheme which is at least as good as the Additional State Pension given up.
PI30P 01 - Introduction to workplace pension provision in the UK12/06/2017 Duración: 05min
Key points Pensions in the UK are provided in a number of different ways: state pensions versus private pensions; occupational versus personal pensions; and trust-based versus contract-based. Employers provide pensions to fulfil legal obligations, because they are a tax-efficient benefit and to retain and attract employees.