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THE NEWSLETTER OF THE SOCIETY OF PENSION PROFESSIONALS
SPP News No. 5, 2017 Issued in November, 2017
page 2 SPP London Evening Meetings
page 3 NewMember
The 2017 Society of Pension Professionals’ Annual Conference focused on sustainability, fairness and engagement
page 4 Who’s writing about SPP?
What’s being visited on the SPP website?
SPP ContactsAround-upoftowhomSPPhasbeentalking.
page 5 Pensions Age
All employees of SPP Member organisations are entitled to receive copiesofPensionsAgemagazine freeofcharge (usualannualsubscriptioncost is£149),aswellasthePensionsAgeemailnewsservice.
Twitter and LinkedIn YoucankeepuptodatewithSPPonTwitterandLinkedIn
We would like to share your organisation's news on the SPP website
Further SPP Letter to HMRC: Proposal for amendment to SI2009/1171 (The Authorised Payments Regulations)Returningtocorrespondence,whichweinitiatedin2015,wehavewrittenagaintoHMRContheabovesubject.
SPP Letter to HMRC: Restitution payments made to pension schemesWehaveagainraisedwithHMRCourlong-standingconcernsonitstreatmentofrestitutionpaymentsmadetopensionschemes.
page 6 HMRC Response: SPP Letter -QROPS: Overseas Transfer ChargeHMRChasgivenusalongawaitedresponsetoourquestionsaboutQROPsandtheOverseasTransferCharge.
Tapered Annual Allowance: A reminder
page 7 SPP Response: Call for evidence on automatic enrolment – Defined benefit alternative quality requirement and provisions for seafarers and offshore workers
DWP draft regulations to allow the Pension Protection Fund to take account of bridging pensions
SPP Response: FCA consultation paper 17/16 – Advising on pension transfers
page 8 SPP Response: FCA retirement outcomes review – Interim report
SPP Response: FCA consultation paper 17/23 – Insurance Distribution Directive implementation: Consultation paper 2
SPP Response: FCA consultation paper 17/28: Financial Advice Market Review: Implementation part II and insistent clients
SPP Response: FCA consultation paper 17/18 – Implementing asset management market study remedies and changes to handbook
page 9 SPP Response: Competition and Markets Agency (CMA) – Investment consultancy services and fiduciary management services market investigation
Issue No. 5, 2017
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If this issue of SPP News was forwarded to you, and you would like to receive a copy direct from us,
please e-mail us at [email protected]
Details of forthcoming SPP London evenings meeting are:
London Evening Meetings
DATE SPEAKERS SUBJECT VENUE TIME
29 November 2017
Alison Gold (Project Director) and Emily Chissell (Assistant Project Director)The Competition and Markets Authority (CMA).
The CMA’s Market Investigation into the Investment Consultancy and Fiduciary Management Services
Baker McKenzie LLP, 100 New Bridge Street, London EC4V 6JA
1700 for 1730
13 December 2017
Yvonne Braun (ABI) The Pensions Dashboard
Travers Smith LLP, 10 Snow Hill, London EC1A 2AL
1700 for 1730
Please click on the link in the subject for more information and booking details.
We gratefully acknowledge the support of Baker McKenzie LLP and Travers Smith LLP in hosting these meetings.
Handouts for the London evening meetings held on September 6th and October 11th are available by clicking on the speakers’ names below.
DATE SPEAKERS SUBJECT
6 September 2017 Caroline Kurup (CMS) and Martin Kellaway (Occupational Pensions Defence Union)
The General Data Protection Regulation (GDPR): The Rocky Road to Success (for Trustees)
11 October 2017 Michael Jones (Linklaters) and Sarah Parkin (Linklaters)
A New Dawn for Master Trusts – for Better or Worse?
These meetings were respectively hosted by Aon Hewitt and Moore Stephens.
New Member WewelcomeonboardourlatestnewMember–LGTVestra,LondonEC3.
The 2017 Society of Pension Professionals’ Annual Conference focused on sustainability, fairness and engagement
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Issue No. 5, 2017
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Wehad150bookingsandcommentsincluded:
“Really enjoyable event”
“Good blend of speakers – demonstrated the Society’s breadth of membership”
“I find the breadth of speakers at the SPP Conference helps to provide more useful insight, compared to other events I attend”
“Excellent speakers and content. Panels worthwhile and lack of grandstanding, which was good”.
HighlightsSPPPresident,HughNolan,setouttheresultsofrecentSPP research on its Members’ views on Fairness inPensions.
Important findings were that four in five respondersbelieved that young people were disadvantaged by thecurrentsystemandthatjustoverhalfconsideredthattheself-employedweretreatedunfairly.Incontrast,71%ofresponderssaidthatthoseabouttoretiregotagooddeal.67%heldthisviewinrespectofpublicsectorworkers.
A talk by Andy Cork of Allen & Overy on “SchemeGovernance:Whybotherandwhatnext?”Inhistalkhesuggested that the Pensions Regulator should take amoreprinciples-basedapproachtogovernance.Hesaid“Let’s have a short code we can all understand. Therecouldalsobepolicyinspectionswheretheregulatorcanresearchandinspectgovernancepolicytoseeiftrusteesaredoingtheirjobright.TPRshouldbetellingtrusteesthat they should be doing more self-evaluation andshouldbehonestastowhethertheyareachievingbasicgoals.”
A panel on Sustainability of DB Schemes, chaired byJonathan Stapleton (Professional Pensions), in whichNaomiL’Estrange(2020Trustees),FionaFrobisher(ThePensions Regulator), Alan Pickering (BesTrustees) andGraham McLean (Willis Towers Watson) discussed thesustainabilityofDBschemes,lookingatwhetherthereisanaffordabilitycrisisinDBprovisionand,ifso,whetherimmediate,radicalactionisrequired;whetheraprecisedefinitionof“stressed”schemesand/oremployerswouldbehelpful;andhow todealwith thoseschemeswhichhavenorealisticprospectofdeliveringbenefitsinfull.
Who’s writing about ?CLICK HERE forthelatestsummaryofSPPpresscoverage,presentedtotheSPP
PublicRelationsCommittee.
What’s being visited on the website?CLICK HERE forthelatestsummaryofvisitstotheSPPwebsite.
Contacts • The Society’s Investment Committee had a meeting with the Transition Pathway InitiativeonOctober11th.
• TheSocietyparticipatedinaDWP/TreasuryroundtableonpensionscamsonOctober13th.
• The Society’s Defined Contribution Committee met the Pensions Regulator for adiscussiononits21stCenturyTrusteeshipinitiativeonOctober19th.
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Issue No. 5, 2017
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The 2017 Society of Pension Professionals’ Annual Conference focused on sustainability, fairness
and engagement
AtalkontheImpactofCyberonPensionsbyMattHawley(PricewaterhouseCoopers)highlightingthatthemonetaryvalue tocriminalsof the typeofdatapensionschemesholdisatleastasgreatassumstheymightstealdirectlyfrom schemes and suggesting key protections againstcyberfraudandresponseswhenithappened.
A panel on Consumer Engagement with RetirementSaving, chaired by Sam Brodbeck (Telegraph MediaGroup),inwhichMeredithGibson(CityUKPensionPlans),GemmaGodfrey(Moo.la)andDarrenPhilp(ThePeople’sPension) reflected on the tendency of most people tobe engaged with short-term concerns, rather than thelong-termhorizonsofretirementsaving,andaddressedthe extent to which capitalising on inertia could be aseffectiveasapolicytoolasencouragingengagement.
Press coverageTheconferencehasreceivedconsiderablepresscoverageincluding:
• TPR governance guidance is “too prescriptive”,ProfessionalPensions
• Why are pensions so unfair,ProfessionalPensions
• UK pension system “unfair” on self-employed and youngsters… but great for public sector workers,CityA.M.
• UK pension system unfair on young people, survey says,ProfessionalPensions
• Insiders criticise “unfair” pensions system,FTAdviser
• Ongoing lack of fairness in UK pensions – SPP,PensionsAge
• New research shows lack of fairness in UK pensions,ActuarialPost
TheConferencewashostedbyAllen&OveryandlogisticalsupportwasprovidedbyWillisTowersWatson.
Pensions Age AllemployeesofSPPMemberorganisationsareentitledtoreceivecopiesofPensionsAgemagazinefreeofcharge(usualannualsubscriptioncostis£149),aswellasthePensionsAgeemailnewsservice.Ifyouwouldliketoreceiveeitherthemagazineand/ortheemailnewsservice,pleasecompletetheapplicationform CLICK HERE [email protected]
Twitter and LinkedIn
YoucankeepuptodatewithSPPonTwitterandLinkedIn.Justclickonthelinksoppositeoratthebottomofthefrontpage.
We would like you to share your organisation’s news on the website
YoumightwanttoconsidersharingwithfellowSPPMembersnewsaboutyourfirmorcompanyontheMemberNewspageoftheSPPwebsite.Suitablecandidatesforinclusionmightbe,forexample,publicationorproductlaunches,newbusinesswinsornewjoiners.
We would be very happy to have details of anything, which you would be interested insharing on the site, and would provide other Members with an alert to its presencethroughourregularSPPMemberUpdates.
Further Letter to HMRC: Proposal for amendment to SI2009/1171 (The Authorised Payments Regulations)
Returningtocorrespondence,whichweinitiatedin2015,wehavewrittenagaintoHMRContheabovesubject.
Thestartingpoint,onwhichweareagreedwithHMRC,isthat,whereanAVCfundvaluedatnomore than£10,000 ispartofabulk transferof funds toamaster trustalongsideadmission of a defined benefit scheme to the PPF, commutation of the fund underregulation11ispreventeduntilthreeyearshaveelapsed.
Ourargument is that this iscontrary to thepolicy intentionof flexibleaccessand thuscreatesanundesirablesituation:inparticularforthemembersconcerned,sincehavingtowaitthreeyearsfortheopportunitytocashoutasmallpotisarguablydiscriminatoryandunfair.Theeffectofthreeyearsofchargesontheirfundvaluewillalsotriggercomplaints.
Toreadourletter,please CLICK HERE .
Letter to HMRC: Restitution payments made to pension schemes
WehaveagainraisedwithHMRCourlong-standingconcernsonitstreatmentofrestitutionpaymentsmadetopensionschemes.
Foracopyofourletter,please CLICK HERE .
Issue No. 5, 2017
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Beginning in 2011, the Society has had periodic correspondence with HMRC on itstreatmentofrestitutionpaymentsmadetopensionschemes.Thesecanbeforavarietyofreasons:miscalculations,misallocations,systempricingerrorsandotheradministrativeissues,orasaresultofpooradvice,mis-selling,orthepoorperformanceofinvestments.Theseallimpactonmembers'benefitsandrequirethattheyareputbackinthepositiontheywouldhavebeenin,iftheactiongivingrisetothepaymenthadnottakenplace.
Discussion within the Society indicates that the effect on pension schemes and theirmembers,causedbyHMRC'sapproach,issufficientlyseriousandwide-rangingtowriteagain.
TheconsequencesofHMRC'sapproacharethatasignificantnumberofpensionschemememberswouldeitherbesubjecttoanannualallowancechargeorlosetheirenhancedorfixedprotection,iftheserestitutionpaymentsaremadetotheschemeinquestion.
HMRC Response: Letter -QROPS: Overseas Transfer Charge
HMRChasgivenusalongawaitedresponse(please CLICK HERE )toourquestions(please CLICK HERE )aboutQROPsandtheOverseasTransferCharge.
Tapered Annual Allowance: A reminderThe2016/17taxyearwasthefirsttaxyearinwhichthetaperedannualallowanceapplied.Although the standard annual allowance remains at £40,000, individuals with adjustedincome (broadly, total taxable income plus pension savings) of more than £150,000 willhavetheirannualallowancereduced.Thiscreatessomepotentialchallengesforpensionschemes.
Pension savings statementsSimilartoincometaxforhigherearners,itisdowntomemberstocollecttheinformationnecessarytocalculatetheirannualallowanceaccuratelyandthendeclareitappropriately(normallyviaaself-assessmenttaxreturn).
The deadline for trustees to issue statements to members who have built up pensionsavingsofmorethanthestandardannualallowance in2016/17wasOctober6th2017.However,thisdoesnotallowformemberswithataperedannualallowance,whichcouldbeaslowas£10,000forhigherearners.Thismeansthattheremaybesomemembersinthescheme,whohaveexceededtheirownannualallowance,butwillnotbeautomaticallyinformedoftheirsituationbythetrusteesandsomaynotbeawaretheyhaveataxchargetopay.Memberscanrequestastatement,whichmustbeprovidedwithinthreemonths– however, depending on when it is requested, this may be too late for the tax returndeadline.
Scheme paysIfamemberexceedstheirannualallowance(afterallowingforanyunusedallowancescarriedforwardfromthelastthreetaxyears)thentheyaresubjecttoanannualallowancetaxcharge.Themembercandeclareandpaythislikeanyotheradditionaltaxthroughtheirtaxreturn.Alternatively,insomecasesthemembercangettheschemetopaythetaxandthemember'spensionbenefitsarecorrespondinglyreduced(called"mandatoryschemepays").
However,themandatoryschemepaysoptionisonlyavailableinrespectoftheadditionaltax involved where pension savings are in excess of the standard annual allowance. Amember who has pension savings in excess of the tapered annual allowance will notautomatically be eligible for scheme pays in relation to the band of pension savings
Issue No. 5, 2017
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This article is derived from Mercer Select, Mercer’s subscriber
service offering news and analysis of UK pension developments
on-line and by email. For further information, please
CLICK HERE . This article is adapted from one, which appeared
in the October 2017 issue of Current Issues in Pensions, which
is part of Mercer Select.
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SPP Letter to HMRC: Restitution payments made to pension schemes
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Issue No. 5, 2017
between the taperedannualallowanceand thestandardannualallowance.Thiscouldresultinsomeindividualshavingtopayasignificanttaxchargedirect.
Trusteescan,however,choosetooffer"voluntaryschemepays"totheirmembers,whichwouldmeetalloftheannualallowancetaxchargesamembermayhave.Althoughthiswouldalleviatesomeofthedifficultiesmembersmayfaceinmeetinganunexpectedtaxcharge,itdoescreatesomechallenges.Forexample,althoughamemberhasuntilJuly31st2018tocompleteanymandatoryschemepaysprocess,forvoluntaryschemepaysthetaxshouldbepaidbyJanuary31st2018inlinewiththeself-assessmenttaxreturnprocess. Given the quarterly returns for administrators to report and pay any tax, thiscompressesthetimescalesconsiderably.
Some members may be eligible for mandatory scheme pays for some of their annualallowance tax charge and only voluntary scheme pays for the remainder. Clearcommunication isneeded tohelp themunderstand thedifferences, and thedeadlinesthatapplytoeachelementofthetaxdue.
Response: Call for evidence on automatic enrolment – Defined benefit alternative quality requirement and provisions for seafarers and offshore workers
WehaverespondedtoDWPonitscallforevidenceontheabove.
Acopyoftheresponseisavailable,please CLICK HERE .
Forthecallforevidence,whichwereportedinissueno.4,2017,please CLICK HERE .
DWP draft regulations to allow the Pension Protection Fund to take account of bridging pensions
DWPhaspublishedaconsultationdocumentontheabove.
Acopyoftheconsultationdocumentisavailable.Please CLICK HERE .
The draft Pension Protection Fund (Compensation) (Amendment) Regulations 2017 aredesignedtoaddressthesituation,wherebysomememberswithbridgingpensionsmightbe financiallybetteroff in thePPF than theywouldhavebeenunder the rulesof theirscheme,inthattheamountofcompensationtheyreceivemightexceedwhattheywouldhavereceivedhadtheirschemenotenteredthePPF.
AcopyofourdetailedresponsetoDWP’sconsultationisavailable,please CLICK HERE .
Response: FCA consultation paper 17/16 – Advising on pension transfers
Wereportedthepublicationofthisconsultationpaperinissueno.4,2017.Toobtainit,please CLICK HERE .
Wehavenowresponded,andourresponseisavailable.Please CLICK HERE .
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Tapered Annual Allowance: A reminder
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Issue No. 5, 2017
Response: FCA retirement outcomes review – Interim report
WehaverespondedtoFCA’sinterimreport.
Foracopyoftheresponse,please CLICK HERE .
Wereportedthepublicationoftheinterimreportinissueno.4,2017.
Response: FCA consultation paper 17/23 – Insurance Distribution Directive implementation: Consultation paper 2
Wehavesubmittedaresponse,(please CLICK HERE ),toFCA’sconsultationpaperonInsuranceDistributionDirectiveimplementation.
ThisDirectivereplacestheInsuranceMediationDirective.Acopyoftheconsultationpaperisavailable.Please CLICK HERE .
Response: FCA consultation paper 17/28: Financial Advice Market Review: Implementation part II and insistent clients
We have responded to FCA on its consultation paper 17/18 on implementingrecommendationsofFinancialAdviceMarketReviewandaddressingindustryconcernsontheneedfornewguidanceondealingwithInsistentClients.Theresponseisavailable.Please CLICK HERE .
Response: FCA consultation paper 17/18 – Implementing asset management market study remedies and changes to handbook
Wereportedthepublicationofthisconsultationpaperinissueno.4,2017.Itisavailable.Please CLICK HERE .
Wehavenowresponded,andourresponseisavailable.Please CLICK HERE .
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SPP is the representative body for the providers of advice and services needed to establish and operate occupational and personal pension schemes and related benefit provision. Our Members include accounting firms, solicitors, life offices, investment houses, investment performance measurers, consultants and actuaries, independent trustees and external pension administrators. Slightly more than half the Members are consultants and actuaries. SPP is the only body to focus on the whole range of pension related functions across the whole range of non-State provision, through such a wide spread of providers of advice and services. We have no remit to represent any particular type of provision.
The overwhelming majority of the 500 largest UK pension funds use the services of one or more of SPP’s Members. Many thousands of individuals and smaller funds also do so. SPP’s growing membership collectively employ some 15,000 people providing pension-related advice and services.
SPP’s fundamental aims are:
(a) to draw upon the knowledge and experience of Members, so as to contribute to legislation and other general developments affecting pensions and related benefits, and
(b) to provide Members with services useful to their business.
About
Copyright. Not to be reproduced without permission.
Every effort has been made to ensure the accuracy of this SPP News, but it is supplied on the understanding that SPP will have no liability arising therefrom.
THE SOCIETY OF PENSION PROFESSIONALSQuantum House, 22-24 Red Lion Court, London EC4A 3EB
Telephone: 020 7353 1688 Facsimile: 020 7353 9296 email: [email protected] web: http://www.the-spp.co.uk
SPP News is produced by the SPP Secretary and contributors from Mercer
Issue No. 5, 2017
Response: Competition and Markets Agency (CMA) – Investment consultancy services and fiduciary management services market investigation
WehaverespondedtoCMAonitsIssuesStatementonitscurrentmarketinvestigation.
Acopyofourresponseisavailable.Please CLICK HERE .
