Pensions Weekly Update – 16 June 2021

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Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes, which you might have missed, with links for further information.

The pensions industry and the corporate world remain uneasy about how prosecuting powers under the Pension Schemes Act 2021 will be exercised. We await the response to The Pensions Regulator’s (TPR) consultation on its approach to the investigation and prosecution of the new criminal offences, but other prosecuting authorities could also use this power. In a published speech delivered at the FT and Pensions Expert DB Forum, David Fairs, Executive Director for Regulatory Policy, Analysis and Advice, confirmed that TPR is in discussion with the Northern Ireland Prosecuting Service, the Crown Prosecution Service in England and Wales and the Crown Office and Procurator Fiscal Service in Scotland about a coordinated approach. It is also working with the Department for Work and Pensions to agree a memorandum of understanding.
The Court of Appeal has handed down its judgment in Britvic Plc v Britvic Pensions Ltd and another. It upheld the employer’s appeal and concluded that the wording “or any other rate decided by the Principal Employer” in a pension increase provision in the scheme rules meant “any other rate, whether higher or lower” (overturning the previous court ruling that the wording meant “any higher rate”). The general message from the judgment is that a party attempting to persuade a court to adopt an alternative interpretation to the natural meaning of unambiguous words used in a pension scheme rule will face an uphill struggle. In this case, the Court of Appeal considered that the relevant tests for adopting an alternative interpretation (for example, where there has been a drafting mistake) were not met.
TPR has made minor updates to its COVID-19 guidance to confirm that it will be contacting schemes under relationship supervision to determine the next steps. This activity was put on hold at the beginning of the pandemic to allow TPR to focus its efforts on supporting schemes and employers experiencing financial distress. TPR will also increase its engagement with scheme administrators so that it can better understand this sector and help improve member outcomes. TPR explains the position in this update.
In the fourth of our #PensionsTensions: New Dimensions factsheets, we focus on key risks in trusteeship and governance. Our final factsheet, tomorrow, will address legal and regulatory risks, and contains some useful hints and tips.

If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.