Week ending 17 July 2020
HMRC has published guidance in its latest GMP equalisation newsletter to clarify the treatment of previously paid lump sum benefits and the future payment of lump sums required as a result of GMP equalisation. There is a requirement to extinguish a member’s rights under the scheme which applies to certain lump sum payments. If a further entitlement to benefits is identified, solely due to GMP equalisation, this will not stop the initial lump sum from being an authorised payment. However, for past trivial commutation payments that were close to the limit of what was allowed, this may not be enough to save the initial payment from becoming unauthorised if a GMP top-up payment takes the combined payment above that limit. As with the previous HMRC GMP equalisation newsletter, GMP conversion is excluded from this guidance.
The GMP Equalisation Working Group has published guidance on the data required for GMP equalisation. The guidance sets out the range of data which trustees should consider obtaining, so that the calculations can be carried out. It acknowledges that not all such data will be available or practical to obtain and puts forward ways to resolve these issues. A range of different calculation solutions are given, with different levels of data precision required.
The Pensions Ombudsman has published its Corporate Plan for 2020-2023. It reports that issues are being resolved at earlier stages, with only 5% of complaints requiring an Ombudsman’s Determination now, as compared with 95% five years ago. 2,000 issues were resolved without the need to approach the pension arrangements and another 2,300 were resolved early before any internal dispute resolution procedure was completed. The Ombudsman is expecting an increase in complaints next year related to the Covid-19 pandemic.
In the news over the last week, the Pension Schemes Bill is at the final hurdle, automatic enrolment limits are reviewed, there is new research into trustee decision-making, the FCA sees signs of improvement in DB transfer advice and a full buy-in is completed.
This quarter’s Arena has a summary of our recent Pensions Perspective, “Endgame planning comes of age”, which looked at how long-term funding and investment plans are evolving and why companies are increasingly taking the lead in designing an endgame strategy. It also shows all the usual financial and investment analysis for the quarter ending 30 September 2020.
Journey plans or glide paths may have been around for a long time but they’re at the heart of the Regulator’s proposed new funding code. In this Pensions Perspective, Leonard Bowman looks at how long-term funding and investment plans are evolving and explains why companies are increasingly taking the lead in designing an endgame strategy for their schemes.
This quarter’s Arena has a summary of our recent Pensions Perspective, “Emerging from lockdown”, which looked at how best to tackle the most common pension issues which companies are currently facing. It also shows all the usual financial and investment analysis for the quarter ending 30 June 2020.
As we keep hearing, we are living in unprecedented times. However, as we turn our attention to the future, what does the “new normal” mean for defined benefit pension schemes? In this Pensions Perspective, Leonard Bowman considers the most common pension issues that companies are facing and how best to ensure that the company approaches these on the front foot.
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Registered Address: 37 Great Pulteney Street, Bath BA2 4DA | Company Registered in England & Wales Company No. 07975135