10 October 2019
Parliament prorogued once more!
Parliament was prorogued again on 8 October, but this time only for the customary few days to pass in order for all the necessary arrangements to be put in place for the splendid occasion that is the State Opening of Parliament, due to take place on 14 October.
Attention now turns to what will be contained within the Queen’s Speech next Monday, with pensions minister Guy Opperman saying that he has a Pensions Bill on his desk which is ready to go and Work and Pensions Committee Chair Frank Field asking whether this Bill will include measures to regulate DB superfunds, but not getting a commitment that it will. However, it remains the Government’s intention to deliver a new regulatory regime for DB superfunds and Mr Opperman hopes that the DWP will be able to respond to its consultation on DB superfunds before Christmas.
We now understand that the Pensions Bill will address three key areas – collective defined contribution schemes, new powers for the Pensions Regulator (including in relation to scheme funding) and new rules compelling participation in the pensions dashboard. The Association of Consulting Actuaries would like two more – increases in auto-enrolment contributions and simplification of DB pensions.
But even though it is now almost certain that the Pensions Bill will be announced in the Queen’s Speech, whether we will actually see it and indeed any other legislation announced next Monday will depend on how the latest stage in Brexit unfurls in the run up to 31 October and whether we are heading towards an early General Election.
“Back to 60” fails at the High Court
On 3 October the High Court dismissed all the arguments put on behalf of the “Back to 60” campaign group which is seeking judicial review of the mechanisms chosen by successive Governments to raise and equalise State Pension Age along with a review of the campaigners’ contention that the Government had failed to inform 1950’s born women of the changes.
The High Court action, led by Michael Mansfield QC for the claimants, made arguments that the increase in State Pension Age for 1950’s born women was unjustified direct age discrimination, was indirect sex discrimination, incompatible with an EU Directive and the European Convention on Human Rights and that the notice given to those affected was unlawful. It was also suggested that the notice arrangements were a breach of the claimants’ legitimate expectations and/or conflicted with minimum requirements of fairness under common law.
However, the Court agreed with all the counter-arguments put by the Government’s legal team – such as that State pensions are not subject to EU-based age discrimination law (as State pensions are not “pay”) and that indirect sex discrimination in relation to State pensions is excluded from EU law. The Court also agreed that the Government was not under a duty to notify those affected of changes contained in primary legislation.
Furthermore, having seen the evidence submitted by the DWP of the information campaigns run over the years and the literature provided, the Court concluded that it was not in a position to conclude that the steps taken by the DWP to inform women of the increase in State Pension Age were inadequate or unreasonable.
In conclusion, the High Court said that whilst it was saddened by the stories given in evidence by the claimants, its role was limited and as such there was no basis for concluding that the policy choices reflected in the legislation were not open to the Government, which in turn were approved by Parliament. The High Court also said that the wider issues raised by the claimants, about whether these choices were right or wrong or good or bad, are not the Court, but are for members of the public and their elected representatives.
This result is not a surprise as any adjustment to the State pension for 1950s’ born women is likely only to happen as a result of a political rather than legal process. But this case does expose once more the fact than many 1950’s born women were simply not aware that their state pension was being put back by up to six years, with a severe impact on a number who were utterly reliant on receiving it earlier.
This may be the end of the legal road, but the campaign will not go away. The next stage may be a Parliamentary and Health Service Ombudsman investigation if there is not a political concession.
Pensions Regulator targets poor record-keeping by some pension schemes
On 2 October the Pensions Regulator made public a campaign it is running that is focussing on 400 selected occupational pension schemes that the Regulator suspects of poor record-keeping as each is believed to have failed to review their data in the last three years. The Regulator has also updated its June 2010 guidance.
These schemes will be required to conduct a data review within six months and report to the Pensions Regulator for what proportion of their members they hold accurate common and scheme-specific data.
It appears that a further 800 schemes are being contacted to remind them to carry out data reviews of both common and scheme-specific data every year – and to set out the results of such in the scheme return.
Trustees discovering that they hold poor quality data will need to draw up improvement plans to rectify the problem.
Separately, the Regulator intends to send communications to more than 1,000 schemes this year about issues such as dividend payments to shareholders and the length of recovery plans.
The Regulator’s expectations on data measurement have been in existence since 2010 and more recently it has been cranking up the pressure – through public reminders and requiring data scores to be submitted with the scheme return since 2018.
This latest news is not a surprise as it was signalled in the Regulator’s corporate plan (see Pensions Bulletin 2019/20). We are supportive of the Regulator’s stance, as some trustees have, for too long, not prioritised administration or known scheme data problems. It will help focus minds on the vitally important task of ensuring pension scheme data is fit for purpose, which is always important, but especially now with major data projects on the horizon, such as GMP equalisation and the future pensions dashboard.
The Pensions Ombudsman has a corporate plan
The latest corporate plan, published by the Pensions Ombudsman on 2 October, focuses unsurprisingly on seeking to resolve every dispute at the earliest point, with no loss of quality. This is to be achieved through a further phase of TPO’s digitisation programme, re-organising the way TPO tackles its casework and expanding TPO’s quality framework.
The TPO aims to improve the “pension dispute customer journey” and is being financed accordingly, with its expenditure budget heading towards £9m in 2021/22 compared to just over £6m in 2018/19. We look forward to hearing about its future success in this area and what that might mean for pension schemes’ own dispute resolution processes.
This Pensions Bulletin does not constitute advice, nor should it be taken as an authoritative statement of the law. For further help, please contact David Everett at our London office or the partner who normally advises you.