Pensions Weekly Update – 28 September 2022

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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 Regulator (TPR) has issued a podcast in conjunction with the Pensions Dashboards Programme, outlining the work that they expect schemes to be taking to prepare for their connection date. TPR intends to engage with industry to understand and help to address the various challenges that dashboards will present, but will take a robust approach to compliance where dashboards failings are due to insufficient preparation by trustees or pension providers.
In the fiscal statement on 23 September 2022, the chancellor announced that the basic rate of income tax will be cut by 1% from April 2023 (a year ahead of schedule) in England, Wales and Northern Ireland, and the additional rate of income tax (currently set at 45% on income above £150,000) will be removed. Changes to income tax rates impact the level of tax relief on pensions contributions. There will be a one-year transitional period for Relief at Source pension schemes to permit them to continue to claim tax relief at 20% – we expect HMRC to provide more detail in due course. The chancellor also announced that draft regulations will be brought forwards to remove well-designed performance fees from the defined contribution charge cap. The Growth Plan contains more details on these and other changes.
The Retained EU Law (Revocation and Reform) Bill was introduced into Parliament on 22 September 2022. Retained EU law is a category of law that was created at the end of the Brexit transition period, in order to incorporate into UK law the EU laws that applied to the UK immediately before the end of the transition period. The bill will abolish the special status of EU law with effect from 31 December 2023 and it will include a sunset date (possibly as late as 2026 for some specified EU law) by which all remaining EU laws will be repealed or incorporated into UK domestic law. The majority of EU law, however, will expire on, or be otherwise dealt with by, 31 December 2023. The principle of the supremacy of EU law, general principles of EU law and directly effective EU rights will end on 31 December 2023.
Also on 22 September 2022, the government introduced the Economic Crime and Corporate Transparency Bill into Parliament. The main purpose of this bill is to make it more difficult to use UK companies for money laundering purposes. It will give Companies House greater teeth to act as a regulator rather than as simply an information registrar. Stricter rules will apply in relation to the incorporation of companies in the UK, and directors of all companies (including directors of existing corporates) will be required to undergo an identity verification process. The bill will also introduce new restrictions on the use of corporate directors, such that the directors of a corporate director must all be natural persons who have had their identity verified. It will no longer be possible to have more than one layer of corporate director.
This week, we are running a series of polls on LinkedIn to gather perspectives of different industry stakeholders. On Monday, we asked pensions managers, “What is the biggest headache on your ‘to-do’ list?” On Tuesday, we asked trustees, “What do you value most in your advisers/service providers?” We would appreciate your input. Please look out for our other questions as the week progresses.

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