Welcome to Hogan Lovells UK pension team’s April 2022 newsletter, covering highlights from the previous month.
Contents
GMP equalisation update
More than three years after the High Court confirmed that the effect of guaranteed minimum pensions (GMPs) must be equalised between men and women, a number of unresolved issues still remain. The latest developments aimed at addressing some of the outstanding questions are as follows:
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Encouraging DC schemes to invest in illiquid assets
The latest chapter in the government’s campaign to encourage investment by pension schemes in illiquid assets, including infrastructure, has been the DWP’s recent publication of a consultation response and draft regulations covering:
- A new requirement for trustees of relevant DC schemes to disclose their policy on illiquid assets in their default SIP;
- A new requirement on DC schemes with assets of over £100m to disclose the allocation between different asset classes in the default fund;
- A concession exempting large master trusts from most of the employer-related investment restrictions; and
- The DWP’s response to consultation on exempting performance fees from the DC charges cap and promoting greater consolidation in the DC market.
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Notifiable events update
Significant changes to the existing notifiable events regime are in the pipeline, which will impact sponsoring employers of defined benefit (DB) pension schemes plus those associated or connected with the employer. These changes had been widely expected to come into force on 6 April this year, but this deadline has passed. There has been no further word from the DWP as to when the new regulations will have effect, although we note that 6 April and 1 October have traditionally been the dates for DWP legislation to come into force. For details of the new requirements, please see our briefing note New notifiable events – what corporates (and their lenders) should know.
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Accessing a bankrupt's pension in a case of fraud
The High Court has allowed an application for an order to enable access to a bankrupt’s pension to satisfy debts arising from fraud. Prior to the bankruptcy, judgment was obtained against him for £3.2m plus costs.
The judgment stated that the debts had been incurred in respect of fraud within section 281(3) of the Insolvency Act 1986. This was significant as section 281(3) provides that a bankrupt is not discharged from any bankruptcy debt incurred by means of fraud.
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Other news
- The Institutional Investors Group on Climate Change (IIGCC) has launched a Net Zero Stewardship Toolkit, to help investors in enhance their stewardship practices and deliver rapid acceleration in decarbonisation.
- The Pensions Administration Standards Association (PASA) Cybercrime & Fraud Working Group has published guidance focused on vetting new employees in the pensions administration industry.
- The Pensions Ombudsman has published guidance on its Early Resolution Service, explaining what it is and the options available to parties to a complaint.
- Regulations to enable the establishment of collective money purchase (CDC) Schemes will come into force on 1 August 2022. The DWP aims to consult later this year on a package of prospective design principles and approaches to enable new types of CDC schemes.
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