• Industry group developing standardised data matching conventions for dashboards
• Warning Notice enough for Pensions Regulator to help pension scheme
• HMRC sends AA reminders in latest newsletter

Industry group developing standardised data matching conventions for dashboards

The Pensions Administration Standards Association (PASA) has brought together the Pensions and Lifetime Savings Association (PLSA) and the Association of British Insurers (ABI) to develop a standardised way of matching individuals to their pension entitlements held on a pensions dashboard.

The group are intending to produce industry-wide data matching conventions (DMCs) that are adoptable across the pensions universe, including state pensions, private sector schemes, master trusts and commercial pensions/buyout providers.  PASA is also engaging with the Pensions Regulator and the Financial Conduct Authority to ensure the solutions align with emerging dashboard regulation, aligning their thinking with the small pots co-ordination group, and working with 11 leading pensions administration software providers to ensure the matching conventions can be implemented.

Comment

It might sound easy to match, for example, a member’s NI number and date of birth and pull in the relevant pension data from different sources, but as PASA notes validation is a delicate balance.  Require too strict a test and you risk not picking up a member’s information, but loosen the rules too far and you risk showing someone else’s information.

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Warning Notice enough for Pensions Regulator to help pension scheme

In a useful reminder that the Regulator has been effective even before the commencement of its new powers under the Pension Schemes Act 2021, it has published a regulatory intervention report showing how intervention improved the outcome for a pension scheme.

Keytec (GB) Limited is the sponsor of a small hybrid scheme.  It has a German parent, Turbon AG.  Following the 2013 scheme valuation the trustee and employer had agreed a two year contribution holiday for the scheme, with just £30,000 paid in the year ending 5 April 2016, and a further contribution holiday agreed during the 2016 valuation.  Even when the employer paid out an £876,000 dividend in 2015 (after the parent company decided to wind up the employer’s manufacturing business and convert it into a distribution company for products manufactured in Europe), the scheme received nothing further.

The Regulator became concerned that the scheme was being treated unfairly compared to shareholders and launched regulatory action.

As Turbon did not engage with the trustees in its attempts to negotiate a better position for the scheme the Regulator issued a Warning Notice of a Financial Support Direction to them on 23 March 2020 and also to its majority shareholder, HBT Holdings.  This brought Turbon to the table and in February 2021 resulted in improved funding (including an upfront payment) and guarantees which provide meaningful long-term financial support for the scheme.

Comment

This case indicates the willingness of the Regulator to intervene, and threaten to use its armoury of powers, even where the scheme is small.  That a good solution was reached within a year shows that the existing powers can work well.

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HMRC sends AA reminders in latest newsletter

HMRC’s latest pension schemes newsletter contains a number of timely reminders:

• Scheme administrators must issue annual allowance (AA) pension savings statements for the 2020/21 tax year by 6 October 2021 to those who made savings to their pension scheme of more than the general (£40,000) annual allowance or where the scheme has reason to believe that a member has flexibly accessed their pension rights (anywhere) before 6 April 2021 and the member had money purchase savings made to the scheme of more than £4,000
• Members who have exceeded their AA for 2020/21 and do not have sufficient unused AA to carry forward to cover the excess must declare this on their Self-Assessment tax return. High earners whose pension savings were lower than £40,000 may need to request a pension savings statement to assist them in working out whether their pension savings during the year were higher than their tapered annual allowance (calculated under new rules this year)

There are also details of some new features on the Managing Pension Schemes Service, confirmation that charity lump sum death payments do not need to be reported through Real Time Information, notice that Pension flexibility statistics will now only be published annually in September and the latest Qualifying Recognised Overseas Pension Schemes’ transfer statistics showing a further drop in transfers.

Comment

As in previous years the group that proactively get a statement will not cover everyone who has an AA charge, as those with a tapered AA may be facing an AA charge despite having pension savings of less than £40,000.  Trustees/employers may therefore wish to send an AA pension savings statement to a wider group.  The change in the taper rules this year (see Pensions Bulletin 2020/11) should mean that a smaller group are affected, but it could be a bigger impact for some and it will be important for them to request this statement.

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