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Our handy guide keeps you up to date with key developments.
For more information on any of these developments and the impact on your scheme, please speak to your usual TLT Pensions team contact.
What's coming up in pensions
We have recently received:
A consultation on draft regulations which, among other things, build on the PSPJOA to deliver the McCloud remedy for judges (offering a choice of legacy scheme or 2015 scheme membership for the period 1 April 2015 to 31 March 2022). Updated regulations are expected shortly, “with a view to running the options exercise in 2023".
A Treasury direction to accompany the remedy regulations for the judicial schemes (above), the Local Government Pension Scheme (LGPS) and other public service pension schemes. The direction includes provisions on the payment of compensation to members and interest.
A consultation on the draft Public Services Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations, and guidance. These aim to modify pensions tax legislation in relation to those impacted by McCloud and to put affected members in the tax position they would have been had the discrimination not happened. HMRC will publish related guidance for members in due course.
Further consultation on regulations to implement the second phase of the McCloud remedy for Civil Service schemes (including the “deferred choice underpin”), which is due to come into effect before a long-stop date of 1 October 2023.
A response to the consultation on amendments to the statutory underpin for the LGPS (alongside related regulations), which has been delayed from 2022. The regulations will be subject to a further period of consultation, with the aim also of coming into force on 1 October.
Further consultations on additional aspects, including on new statutory guidance on remedy implementation.
A Judicial Review into McCloud remedy costs began at the end of January 2023; the outcome is awaited.
In response to Covid-19, legislation was created to allow NHS staff to return to (or increase their) work without negative effect on their pensions. A consultation had already proposed to extend the easement until 31 March 2023.
In October, the Government confirmed the extension of temporary Covid-related easements for the NHS Pension Scheme. The measures will be kept under review.
A December consultation changes to the 1995 section of the NHS Pension Scheme contained further proposals designed to help retain experienced NHS clinicians and remove barriers to returning to work from retirement (introducing partial retirement flexibilities and pensionable re-employment, among other things). The reforms "are expected to be implemented in late spring 2023".
Fair Deal: A long-awaited response to the 2019 consultation on changes to the “Fair Deal” confirmed that the Government is reconsidering its approach, and that a new consultation is expected.
Exit Payments: The response to an August consultation on Public Sector Exit Payments and Severance Payment guidance (in respect of Central Government) remains awaited. In contrast, a further consultation on the reform of local government exit pay is now required (following the 2020 consultation).
Boycotts, divestment and sanctions: Following the late addition to the PSPJOA on ‘investment decisions’, a Bill is expected in 2023.
No timescales have been given.
Investment: In December, the Government announced a set of reforms intended to "drive growth and competitiveness in the financial services sector". The proposals include a consultation on guidance on asset pooling for the LGPS, and on requiring LGPS funds to ensure they consider investment opportunities in illiquid assets (such as venture and growth capital) “as part of a diversified investment strategy". This is expected in early 2023.
Climate change: We await the coming into force of regulations (due by April 2023) implementing proposals on governance and reporting of climate change risks for the LGPS. These aim to ensure that climate change risks and opportunities are incorporated in an administering authority’s decision making process, and that they report on these annually, in line with the recommendations of the Taskforce on Climate-related Financial Disclosures. The first reports are likely to be required by December 2024.
Good Governance Review: A consultation is expected in 2023. Proposals are likely to include more formal training requirements for pension committee members, the streamlining of the annual report document (with funds reporting on performance against their various strategies), development of standard administrative KPIs to allow performance comparisons between funds, and a requirement for funds to have a workforce strategy.
Survivor benefits: A consultation on survivor benefits is expected in March 2023, addressing issues raised in the Goodwin discrimination case and proposing the removal of the upper age limit for paying death grants.
SAB cost management process: On 31 January, the Government opened a consultation seeking views on proposals to make minor technical amendments to the rules of the LGPS in relation to the Scheme Advisory Board (SAB) cost management process. The consultation closes on 24 March 2023.
The Pensions Regulator’s Single Code remains awaited – consider how you can get ahead and start taking action now.
Pensions Dashboards: be prepared. The Pensions Dashboards Regulations 2022 came into force in December and confirm a staging date of 30 September 2024 for all public service pension schemes. TPR is currently consulting on a draft compliance and enforcement policy setting out "expectations for trustees and scheme managers” and aims to publish the final policy in spring 2023. Schemes should ensure they are aware of the PDP’s revised standards, and TPR's guidance. A ‘connection guide’ for the LGPS is expected early in 2023.
01 February 2023