Pensions agendaSpring clean your schemeDate: April 2013	 Advisers: Eversheds LLP1		Pensions Regulator’s new objective – In...
6		New disclosure requirements – New disclosure requirements for occupational and personalpension schemes are due to come ...
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Eversheds Pensions Agenda - Spring 2013


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Eversheds Pensions Agenda - Spring 2013

  1. 1. Pensions agendaSpring clean your schemeDate: April 2013 Advisers: Eversheds LLP1 Pensions Regulator’s new objective – In the 2013 Budget the Chancellor announcedthat the Pensions Regulator will be given a new objective. The precise wording is still tobe confirmed but the Chancellor said that, in future, the Regulator would have to haveregard to the “growth prospects of employers”. Read more.Action: Employers and trustees should consider how this may impact theirscheme’s funding arrangements and whether they should factor the newobjective into current negotiations.2 Abolition of DB contracting-out – The Chancellor also confirmed in his Budget speechthat the introduction of the single-tier state pension (and consequently the abolitionof DB contracting-out) will be brought forward to April 2016. Private sector employerswill be able to amend their scheme to offset the increase in their national insurancecontributions resulting from this. Read more.Action: Employers should assess how the abolition of DB contracting-outwill impact them and consider what, if any, changes they plan to make totheir scheme.3 Downgrading of RPI – In a surprise move, the UK Statistics Authority has announcedthat the Retail Prices Index (RPI) will no longer be designated as a national statistic, onthe basis that it does not meet international standards. This has created uncertainty overwhether RPI remains a suitable index for determining pension increases and revaluationunder DB schemes.Action: Trustees and scheme sponsors should take advice on how thedowngrading of RPI impacts their scheme.4 DC Governance – Auto-enrolment means that the governance of DC schemes is inthe spotlight now more than ever. The Pensions Regulator has recently issued a draftCode of Practice and regulatory guidance on DC governance, which includes 31 qualityfeatures that it would expect to see in a good quality DC scheme.Action: Trustees of DC schemes and pension providers should review theirschemes to ensure that they meet the requirements set out in the Regulator’snew Code of Practice and regulatory guidance.5 New Fair Deal guidance – HM Treasury is expected to finalise its new Fair Dealguidance shortly. If the new guidance follows the draft issued last November, privatesector employers will no longer be able to provide broadly comparable schemes tonewly transferred staff, who will instead have to be given continued access to therelevant public service scheme.Action: Private sector contractors and public sector bodies covered by FairDeal need to consider how the new guidance will impact future outsourcingsand re-tenders. Read more.
  2. 2. 6 New disclosure requirements – New disclosure requirements for occupational and personalpension schemes are due to come into force on 1 October 2013. The most significant changesinclude new requirements for DC schemes to provide information to members about lifestyleinvestment options (including target date funds) and a clarification of the rules onelectronic disclosure.Action: Trustees and pension providers must ensure that they are ready to complywith the new disclosure requirements by 1 October 2013.7 Auto-enrolment simplification – The DWP plans to make various technical changes to theauto-enrolment legislation including changing the definition of ‘pay reference period’ to alignit to the way in which payroll systems currently operate and introducing an exemption forworkers with fixed or enhanced protection. It is also considering introducing an easement foremployers that automatically enrol all of their staff. Read more.Action: Employers will need to review their auto-enrolment processes andcommunications in light of these changes, including the process for dealing withindividuals with fixed or enhanced protection.8 New clearing and reporting requirements for OTC derivatives – new clearing and reportingrequirements for over-the-counter (OTC) derivatives are due to apply to pension schemes fromAugust 2015.Action: Although these new requirements are still some way off, it is importantthat trustees understand these changes, including how they will impact the costof entering into OTC derivatives and the new collateral requirements.9 Cash incentives for agreement to scheme changes – Any employers planning to offerincentives in return for the agreement of their staff to proposed scheme changes (such asclosure to future accrual) must ensure that they comply with the Regulator’s 2008 guidanceon employee consultation exercises.Action: Employers need to carefully consider the impact of the Regulator’s guidancebefore undertaking a consultation exercise in which they are planning to offer anincentive to staff who agree to the proposed changes.10 Changes to TUPE requirements – From 1 October 2013, where staff have access to aDC occupational pension scheme immediately before a TUPE transfer, the new employerwill be able to match the contributions paid by the former employer, instead of matchingcontributions up to 6%. Read more.Action: Companies need to be aware of these changes when considering internalreorganisations or the acquisition of staff from another business.Pensions agendaApril 2013If you have queries about these or any other issues affecting yourpension scheme please contact your usual Eversheds’ adviser or contact:Anthony ArterHead of Pensions0845 497 0536anthonyarter@eversheds.comFrancois BarkerBirmingham0845 497 1559francoisbarker@eversheds.comIan DaviesCardiff0845 498 7601iandavies@eversheds.comJeremy GoodwinLondon0845 497 4564jeremygoodwin@eversheds.comEle LoveringManchester0845 497 8120elelovering@eversheds.comRichard SheltonLeeds0845 498©Eversheds LLP 2013. Eversheds LLPis a limited liability partnership.EHRG.911If you missed ourJanuary 2013 editionof Pensions Agendaclick here.