Pensions Weekly Update – 18 September 2024

Authors:

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

The Pension Protection Fund (PPF) has published its consultation on levy rules for 2025-2026. The levy estimate remains at £100 million for 2025-2026. The PPF says that it will continue to work with the government to seek the legislative changes required so that it can reduce the levy estimate for future levy years. The PPF proposes setting the levy scaling factor at 0.35 (2024/2025 comparator 0.40), the scheme-based levy multiplier at 0.000018 (2024/2025 comparator 0.000015) and maintaining the risk-based levy cap at 0.25 per cent of liabilities. While a change in levy methodology is proposed, the PPF estimates that most schemes that pay the risk-based levy will see a decrease in their risk-based levy. A change is proposed that will make it easier to recognise deficit reduction contributions, and the PPF encourages schemes that have been through a buy-in exercise to apply for a waiver of the risk-based levy, where appropriate. The PPF notes that the two key requirements for a waiver of the risk-based levy in this regard are that (1) all defined benefit (DB) liabilities must be covered and (2) there must be no further contributions to the scheme in respect of DB liabilities. The PPF has said that it is open to schemes evidencing that any subsequent employer contributions are for the purpose of covering winding-up expenses or other expenses and are not a further contribution for legislative purposes. The usual timings will apply, with midnight on 31 March 2025 being the key time and date to remember. This is the deadline for submitting scheme returns and electronic contingent asset certificates to The Pensions Regulator (TPR). Consultation closes at 5 p.m. on 23 October 2024.
In TPR’s latest blog, David Walmsley, Interim Director of Supervision – Market Oversight, explains why TPR is expanding its engagement with pensions administrators. TPR describes the role of the administrator as “crucial”, but the role is evolving without formal regulation and the quality of service varies. TPR will build on its successful pilot with three “strategically significant” administrators and will engage with an additional 10-15 large administrators on a voluntary basis. TPR will focus on four key areas, including each administrator’s plans to invest in upgrades to any outdated legacy systems.
Debbie Abrahams, MP for Oldham East and Saddleworth, has been appointed as the new Chair of the Work and Pensions Committee, as the successor to Sir Stephen Timms. She brings a wealth of experience with her, having served on the committee for eight years and having previously served as the shadow minister for work and pensions, and the shadow secretary of state.
Chris Webber, a partner in our Financial Services team, takes a look in this blog at a review undertaken by the Financial Conduct Authority (FCA) into how well a sample of principal firms are complying with rules introduced in December 2022 to improve the appointed representatives regime. The regime allows self-employed representatives to engage in regulated activities without having to be FCA authorised.

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