Pensions Weekly Update – 16 October 2024

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.

• A further set of regulations has been laid before Parliament in relation to the abolition of the lifetime allowance. The regulations will come into force on 18 November 2024 and have effect for the tax year 2024-2025 and subsequent tax years. The regulations address errors identified in previous legislation and amend the Finance Act 2024 in respect of lump sum death benefits, transitional tax-free amount certificates, the availability of the overseas transfer allowance, the calculation of the lifetime allowance previously used amount, and the information required between members and pension scheme administrators. The regulations also make consequential amendments in respect of the Pension Protection Fund and the Financial Assistance Scheme.
• The Society of Pension Professionals (SPP) has published a report entitled “Pensions Tax Relief: Separating Fact From Fiction”. The report acknowledges the rationale for reducing pensions tax relief to make savings for HM Treasury, highlights that the true cost of pensions tax relief is considerably smaller than headline figures, details some of the consequences of shifting to a single rate of pensions tax relief, and examines various alternatives.
• In a speech published on 10 October 2024, the chief secretary to HM Treasury sets out the government’s vision for infrastructure. This includes a ten-year national infrastructure strategy that will be published in spring 2025, alongside the conclusion of a multiyear spending review. The Rt Hon Darren Jones MP says that there will be a drive for private sector investment and that “we will bring together the deep pension pots that exist throughout the United Kingdom, but which often don’t provide a particularly good return. By our estimates, pension pots could be boosted by £11,000 on average, whilst unlocking £8 billion of new productive investment into our economy.”
• IFM Investors was founded by Australian pension funds and is one of the world’s largest infrastructure managers. In collaboration with various institutional investors, including LGPS Central Limited, Border to Coast, Nest, the Universities Superannuation Scheme and the Pensions and Lifetime Savings Association, IFM Investors has produced a report entitled “Mobilising Pension Capital for Net Zero: A Policy Blueprint for the UK”. The report sets out some recommendations for the UK government that would help to create a supply of new investable projects attractive to pension funds.
• The Pensions Administration Standards Association (PASA) has published the first content in its new Dashboards Toolkit. This includes information about the connection options offered by additional voluntary contribution (AVC) providers, together with a checklist for administrators and a questionnaire for trustees to issue to their AVC provider in advance of connection. AVC connection is described by PASA as a “key issue”.
• In our latest blog post, Lynn Housecroft looks back over some pensions highlights of this millennium and sets out her hopes for the next five years. Do you agree with Lynn?
• Our Labour & Employment team has put together a briefing paper on the key changes being proposed by the UK government’s employment rights bill. The team is also hosting a webinar on 17 October 2024 at which the proposed changes will be discussed.

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