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Rounding up the latest trustee news
Tyron Potts gives an in-brief round-up of recent news for trustees, covering a variety of topics, research and developments.
TPR: 21st Century Trusteeship
Following recent research, The Pensions Regulator (TPR) has launched a refreshed campaign – part of its 21st Century Trusteeship strategy – to protect workplace pension savers by driving up the standards of governance across pension schemes.
A series of targeted emails to trustees will promote a new page on TPR’s website explaining how standards should be met and the consequences if they are not. Initially, the campaign focusses on the importance of good governance, with additional content to be added over time.
Risk sharing schemes inquiry
The Work and Pensions Committee has launched an inquiry into Collective Defined Contribution (CDC) arrangements (aka “Defined Ambition” schemes). The Committee is inviting evidence (by 8 January) from any interested parties on benefits to savers and the wider economy and on converting Defined Benefit (DB) schemes to CDC. Danny Wilding, Partner, wrote the blog post on exploring the Dutch Pensions system which was published shortly before the inquiry was announced, which you can read here.
IASB: IFRIC 14
The International Accounting Standards Board (IASB) is reconsidering its interpretation statement IFRIC14 – which relates to limiting the recognition of DB scheme assets (surpluses) in company accounts under international accounting standard IAS19.
Previously, the IASB had said companies’ ability to recognise surpluses would be limited where other parties (such as the pension scheme trustees) had certain unfettered rights, such as to trigger wind-up or 'buy-out' individuals’ benefits.
The IASB is concerned that this interpretation will lead to scheme rules being amended to negate this effect. They are instead going to explore a more “principles-based” approach, though no timetable has been given for its introduction.
Auto-enrolment: Phasing of minimum contributions
TPR has issued a reminder and revised guidance for DC scheme managers relating to the phased increase in minimum auto-enrolment contribution rates from April 2018. The guidance considers how the minimum rates vary according to the earnings definition used for contributions purposes.
TPR: Perceptions Tracker 2017
The Pensions Regulator has published the findings of its ‘Perceptions Tracker’ survey for 2017. 66% of respondents rated TPR’s performance as ‘very good’ or ‘good’ (compared with 71% of respondents in 2016).
"The PPF estimates that it will collect £550 million in levies for 2018/19 – 10% less than 2017/18"
PPF: 2018/19 Levies and third triennium
The Pension Protection Fund (PPF) estimates that it will collect £550 million in levies for 2018/19 – 10% less than 2017/18 (£615 million). In its consultation on the draft levy rules for 2018/19, the PPF also confirms the use of agency scores for assessing insolvency risk for some sponsors.
The PPF expects two-thirds of schemes to see a lower levy under these new proposals. Final levy rules for 2018/19 will be published in December. In the meantime, Chris Ramsey, Associate, wrote a blog that sets out the changes in more detail.
For further reading, the blog by Andrew Vaughan, Partner looks at the settlement agreed with the Pensions Regulator for Hoover Limited.
DWP: Cridland Review of SPA
The Department for Work and Pensions (DWP) has issued a formal response to the Cridland Review of State Pension Age (SPA) and is to implement the key proposals.
In particular, SPA will now rise from 67 to 68 between 2037 and 2039 (previously between 2044 and 2046), affecting those born after 5 April 1970. Legislation to formalise this change will be delayed however until a further review (incorporating more up to date longevity projections) is conducted.
