What's coming up in pensions

The Department for Levelling Up, Housing and Communities (DLUHC) has commenced a new consultation on the ‘Governance and reporting of climate change risks’ for the LGPS. The proposals 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 requirements are generally in line with those applying to large and authorised private sector schemes under the Pension Schemes Act 2021, with a key difference being their proposed application regardless of fund size.

The consultation is open until 24 November 2022, with the regulations due to come into in force by April 2023 (and the first reports required by December 2024).

Regulations implementing the retrospective part of the McCloud unlawful age discrimination remedy came into force on 1 October 2023. See our November newsletter for more detail. Since then, the Local Government Association has also released a guide for LGPS administering authorities on how underpin protection works. Further tweaks and clarifications to correct minor errors and omissions have also been made to the legislation, including by regulations in respect of Judicial Pensions and Police and Firefighters’ Pensions, to ensure that the remedy can be delivered correctly.

GAD’s guidance on staff transfers has been updated with new actuarial assumptions to be used for broad comparability assessments from 1 June 2024, for staff transferring between public service pension schemes under Fair Deal 2013 or 2004. The guidance includes short-term assumptions to be used where benefit accrual subject to the McCloud remedy is being valued.

An August consultation on Public Sector Exit Payments and Severance Payment guidance (in respect of Central Government) remains open for comment until 17 October 2022.

In contrast, the Government has confirmed that a further consultation on the reform of local government exit pay is required (following the 2020 consultation). As with Fair Deal, no timescale has been given.

The Government Actuary's Department has announced that broad comparability assessments, which primarily look to protect future pension rights on staff compulsorily transferred within the public sector, will resume in full this autumn.

Work on most assessments was paused in 2020 in response to the McCloud judgment (see above). They were partially restarted earlier this year following the resolution of some technical uncertainties.

We understand that DLUHC can be expected to consult on Good Governance requirements for the LGPS this year.

This marks the culmination of the project which commenced in April 2019 to improve standards of governance and administration in the LGPS, and to ensure they better match those expected by the Pensions Regulator.

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.

Further changes 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) came into force from 1 April, with more to come on 1 October this year: see the DHSC’s consultation response.

In addition, on 3 May, a new consultation was issued, on changes to the NHS Pension Scheme Regulations 2015 concerning uplifts to member contributions in 2023/24 in line with the ‘Agenda for Change’ pay award.

A new team of counter fraud and data experts has been assembled to tackle fraud against the public purse, with an initial target of preventing £180 million of fraud in its first twelve months.

The team will:

• agree counter fraud plans for public bodies and departments, and review their progress;
• provide expert support on relevant risks and threats, and help design defences, including testing their effectiveness;
• brief Cabinet Ministers on the latest fraud landscape;
• build a National Counter Fraud Data Analytics Service to provide advanced data capabilities to fight and prevent fraud against taxpayers; and
• enhance the use of fraud intelligence across the public and other sectors.

The current National Fraud Initiative is said to have prevented more than £200m of public sector pension fraud between 2020 and 2022.

• Speak to us to understand what the recent appeal in Virgin Media Ltd v NTL Pension Trustees II Ltd means for you. The Court of Appeal upheld the High Court’s 2023 decision, which means that some scheme amendments, if made without the required actuarial confirmation, could be invalid.

• TPR’s General Code: public sector schemes should continue to ensure they are up to speed with TPR's General Code, and are taking the steps they need to in order that their governance standards are up to scratch and they meet TPR’s expectations. See our Insight for more detail.

• Pensions dashboards: schemes should be well on their way to preparing for dashboard connection, with a deadline of 31 October 2025 for public sector schemes in scope. See our Trustee Agenda Briefing for action points. The Local Government Association has published the final version of its dashboards connection guide for LGPS administering authorities, and the related AVCs and pensions dashboards guide.

• Our Ombudsman Updates cover determinations with public sector angles, including in relation to transfer processes, administering death and ill-health benefits, and exercising discretions. The latest edition includes a review of some misinformation complaints – and how to avoid them, plus a key update relating to the recovery of overpayments and the procedures schemes must follow.