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PENSION ADMINISTRATION TECHNICAL HELP
PATHways 166
Highlighting pensions news and legislation that has
particular relevance to what we do in pension administration
In this edition of PATHways, we cover:
- Abolition of the lifetime allowance
- HMRC newsletter
- New Deputy Pensions Ombudsman appointment
- Pensions dashboards
- Pension scams
- Revaluation Order 2024
Abolition of the lifetime allowance
As mentioned in previous editions of PATHways, regulations intended to correct the existing legislation in relation to the abolition of the lifetime allowance (LTA) came into force on 18 November 2024 and mainly have effect from 6 April 2024.
Between them, The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 and The Pensions (Abolition of Lifetime Allowance Charge etc) (No 3) Regulations 2024 have over 35 amending regulations, including in relation to the following aspects:
- The calculation of certain crystallised rights for testing the value of the member’s pension rights does not exceed the commutation limit for the purpose of paying trivial commutation lumps sums.
- The formula used to determine the member’s pension commencement lump sum entitlement where a member holds scheme-specific lump sum protection.
- Various changes relating to individuals with primary or enhanced protection.
- Minor updates to the process for transitional tax-free amount certificates.
- Changes to certain requirements relating to transfers to qualifying recognised overseas pension schemes.
HMRC newsletter
On 18 November 2024, HM Revenue & Customs (HMRC) published an update to Pension Schemes Newsletter 163, which was originally published in October 2024.
The update corrects the information provided under the ‘International’ heading, relating to the guidance on the abolition of the LTA amendment regulations. The revised guidance now informs of a new paragraph in those regulations, to modify the availability of a member’s overseas transfer allowance where the member has had a pension in payment before 6 April 2006.
New Deputy Pensions Ombudsman appointment
The Pensions Ombudsman (TPO) has announced that Camilla Barry has been appointed as Deputy Pensions Ombudsman (DPO), for a term of four years from 9 December 2024.
Camilla will replace the current DPO Anthony Arter, who remained at the TPO after his term as Pensions Ombudsman ended to complete his cases for the Pensions Dishonesty Unit and to deal with any conflicts for TPO.
Pensions Dashboards updates
The Pensions Dashboards Programme (PDP) has recently released updated draft reporting standards. This set of standards includes the requirements for schemes and dashboard providers, in relation to generating, recording and reporting data. This includes information for security protection, tracking performance and helping regulators to monitor compliance with legal obligations.
PDP has also informed that minor updates have been made to the data standards and the code of connection.
All standards will be mandatory but remain in draft until final approval by the Secretary of State for Work and Pensions.
Separately, on 6 November 2024, Chris Curry, Principal of the PDP, provided a progress update on the programme. Accompanying this were some Q&As covering a number of topics, including on the MoneyHelper pensions dashboard, user testing, the Gov.UK identity service, matching criteria and AVCs.
PASA new and updated guidance
The Pensions Administration Standards Association (PASA) has published new and updated guidance during June 2024 in several of the areas its working groups cover.
Data Presence vs Accuracy
The PASA Data Working Group continues to produce content regularly and has published new guidance on ‘Data Presence vs Accuracy’. The main part of the guidance focuses on what trustees can do to improve data accuracy, suggesting trustees conduct an audit of data quality to identify potential issues in their data and areas of weakness, and on reviewing the data accuracy, carry out data remediation work as necessary. The guidance also suggests that consideration is given to ongoing monitoring on a periodic basis to help ‘future proof’ data accuracy.
Master trust transitions guidance
The PASA Master Trust Working Group has published updated guidance on master trust transitions following on from the original version issued in November 2019.
The updated guidance accounts for developments in the master trust space in the intervening years and is designed for situations involving transitions of savers to and from master trusts, focusing on the two most common scenarios:
- master trust to master trust; and
- single employer trust to master trust.
As well as industry developments, other topics covered include transition planning and suggested project governance, and communications.
Pension scams
The Pensions Regulator (TPR) has continued its recent activity of highlighting pension scams by issuing a press release relating to a storyline in EastEnders covering the “devastating impact of pension scams”.
To help develop the story, TPR were one of the organisations that shared insights into the tactics used by scammers and the far-reaching financial and emotional toll on victims.
The press release also includes a call to action for the industry to report scams and the suspicions of scams to Action Fraud.
TPO has also published details of a recent determination concerning pension liberation. In this case TPO determined that the scheme trustees had committed various breaches of trust and maladministration and were ordered to repay over £5.2 million into the affected schemes.
Revaluation Order 2024
The Occupational Pensions (Revaluation) Order 2024 was published on 20 November 2024 and will come into force on 1 January 2025. The Order provides the revaluation percentages that will apply to benefits in excess of GMP for deferred members of a defined benefit pension scheme, who will take their pension benefits in 2025.
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