Week ending 17 January 2020
The Chancellor has announced that the consultation which was expected to start in January on the future of the RPI will be delayed until the Budget on 11 March 2020. The consultation is expected to consider the UK Statistics Authority’s proposal to transition RPI to become CPIH and to consider the timing of such a change (between 2025 and 2030, at which point the UKSA can make the change unilaterally). In a letter from the Chancellor, the consultation is confirmed as lasting for 6 weeks until 22 April, with the Government’s and UKSA’s response due before the summer Parliamentary recess.
The chief executive of TPR has confirmed that the first of two consultations on its new DB funding code (carried over from 2019 due to the timing of the General Election) will begin in March 2020. This will focus on funding principles, with a consultation on the new code itself later in 2020.
There is widespread speculation that, as a result of its review of the problems the tapered annual allowance is causing the NHS, the Treasury is proposing to raise the level of threshold income from £110,000 to £150,000. Hopefully this is not its only proposal!
In the latest HMRC Countdown Bulletin there is a reference to how the work HMRC is doing on allocating payments from pension schemes is affecting the delivery of the final GMP data cuts. It is reported that a revised timeline for delivery of the data cuts could be published next week.
TPR has published the Determination Notice detailing its decision to issue two contribution notices for a total of just over £9.5 million to Dominic Chappell in respect of the BHS pension schemes in January 2018. TPR’s Determinations Panel decided that a number of acts made by Mr Chappell were detrimental to the two pension schemes. His Upper Tribunal appeal against the two contribution notices was unsuccessful. The PPF is now responsible for obtaining the money from Mr Chappell, for the benefit of the schemes.
In the news this week, the long-awaited tax guidance on some GMP equalisation issues is published, BAE Systems agrees to contribute £1 billion to its main DB scheme and PACE completes a second buy-in.
Over the autumn of 2019, BAC conducted an extensive survey of the actions which companies are taking to manage their defined benefit (DB) and defined contribution (DC) pension arrangements.
2019 marked 50 years since Neil Armstrong walked on the moon and this was obviously on the Queen’s mind in her Christmas message as she talked about a bumpy year but one with small steps of progress as well. In terms of pensions, it also felt like a year of small steps and occasional bumps. In this quarter’s Arena, we take a positive look back at 2019, as well as looking forward to some expected pension developments over 2020.
Despite the very different circumstances facing individual companies, bac‘s autumn 2019 survey reveals a surprisingly consistent picture of the actions which companies are finding most attractive to manage their DB and DC pension arrangements.
As DB liabilities have become legacy issues to be managed, governance has become the umbrella term for a broad range of risk management tools. In this publication, we look at the DB governance solutions we have helped our clients to implement.
Unit 13A | Church Farm Business Park | Corston | Bath | BA2 9AP | Telephone: +44 (0) 1225 481450
Registered Address: 37 Great Pulteney Street, Bath BA2 4DA | Company Registered in England & Wales Company No. 07975135