What's coming up in pensions

• Further updates have been issued in respect of the McCloud unlawful age discrimination. HMRC’s latest newsletter(published 19 September) announces the relaunch of its ‘calculate your public service pension adjustment service’, with improvements having being made. The newsletter covers, among other items, reporting interest as savings income, and reclaiming unauthorised payments. Detailed guidance for members, and further guidance about the offsetting process for the unauthorised payments charge, will be available in due course.

• The Fire Brigades Union (FBU) has been refused (on 22 July) permission to appeal to the Supreme Court in relation to the Government's proposed method of paying for McCloud costs. (The FBU and British Medical Association’s judicial review of the method was earlier dismissed by the High Court in 2023, and again by the Court of Appeal in April 2024).

• DLHC published statutory guidance in June for LGPS administering authorities in England and Wales on implementation of the McCloud remedy. The guidance sets out the government’s views on how the remedy should be approached in key areas, and gives an overview of the framework and conditions for McCloud compensation and examples of where compensation may be payable.

• A new version of the McCloud transfer calculator has been published, correcting minor errors. GAD has also produced a calculator (plus guidance) to help work out interest due on retrospective payments made because of the remedy.

• MHCLG has, in consultation with GAD, issued new flexible retirement guidance under the LGPS Regulations for pension administrators in the LGPS. This guidance replaces the April 2016 version. It includes information on how the McCloud remedy affects flexible retirement calculations and confirms the death grant calculation for a member who dies after flexible retirement.

• The new Labour government is undertaking a review of UK pensions. Among other things, the review will include a focus on the LGPS, investigating how its investment power might be an 'engine for UK growth'. A Call for Evidence, inviting interested parties including LGPS stakeholders to respond on the first phase of the Review, closes on 25 September.

• The LGPS Scheme Advisory Board (SAB) published a statement on 17 September for LGPS funds and stakeholders addressing increased queries to and lobbying of administering authorities about how LGPS funds are invested. It addresses what kinds of ESG considerations are appropriate, and what level of flexibility decision makers have to respond to lobbying. SAB is seeking an opinion from Counsel as to whether there is a need to update previous advice on the nature of fiduciary duty for administering authorities. The statement notes that it is ‘important that those charged with management of an LGPS fund understand the decision-making function they have and maintain an appropriate level of knowledge and skills, as underpinned by legislation, legal opinions and guidance to exercise their duties’.

• The SAB and Institute of Chartered Accountants in England and Wales (ICAEW) has published a practical guidance ‘informer’ document to explain the timeline and information flow for the LGPS’ triennial valuation. The primary audience is expected to be scheme employers and their auditors, but pension fund officers and actuaries may also find the document useful. 

• The SAB has published its eleventh LGPS Scheme Annual Report. This provides information about the status of the LGPS for its members, employers, and other stakeholders, aggregating information from the 86 fund annual reports.

• The Local Authority Pension Fund Forum (LAPFF) has published its recommendations for UK climate policy ‘outlining how UK government can ensure policies support investment in climate action while boosting competitiveness and long-term growth’.

• The LGPS’ annual benefit statement (ABS) technical guide has been updated. The latest version reflects ABS requirements from 2025 onwards, taking into account McCloud and pensions dashboards.

• Further amending regulations are expected imminently, aimed at fixing some of the issues that have come to light following the Finance Act 2024 changes to of the Lifetime Allowance (LTA). HMRC guidance notes and newsletters continue to be issued (at the time of going to press, newsletter 162 was the latest), and the Pensions Tax Manual is being updated. Public sector schemes should continue to work with their advisors and administrators to understand and implement the changes – and stay aware of continued developments in this area.

• An updated version of the LGPS administrator guide to Abolition of the LTA was published in late June.

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.

• TPR’s Public service pension schemes research report 2023 has been published, tracking governance and administration practices among public service pension schemes, including the approach to risk management, annual benefit statements and breaches of the law. The report covers awareness and perceptions of pensions dashboards, and the actions taken by schemes in relation to climate-related risks and opportunities. This survey included new questions on data management issues, investment in data management and technology, TPR codes of practice and guidance, and pension board diversity.

• GAD will shortly be updating its actuarial Factor Guidance Notes for public service schemes. This follows completion of a major actuarial factors review project.

The Police Pensions (Employer Contributions) (Amendment) Regulations 2024 come into force on 1 October 2024. The Regulations will allow the rates in the formal actuarial valuations, which found that the employer contribution rate should be increased, to apply without further need for legislation, plus allow the employer contribution for pensions payable in respect of police officers in England and Wales to be determined by the Secretary of State on advice from the scheme actuary.

• 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.