The Department for Work and Pensions (DWP) is consulting on draft regulations that would make miscellaneous changes to various regulations that govern occupational, pension and stakeholder pension schemes.
The main changes being proposed are:
- a new Pensions Regulator power to impose a maximum civil penalty of £5,000 (in the case of an individual) or £50,000 (in other cases) if a person has without reasonable excuse failed to comply with their consultation obligations under the pension consultation regulations (i.e. requiring a consultation period of at least 60 days when certain ‘listed changes’ are proposed to pension schemes). Currently there is no express sanction for breach. (for more information on the consultation obligations seeEPB briefing 149);
- an extension of the circumstances in which a trivial commutation lump sum can be taken;
- a new power allowing schemes to amend their rules by resolution to reflect the new lower statutory revaluation cap that is intended to come into force in April 2009 (see EPB bulletin 12 December 2008) and the current statutory indexation cap for pensions in payment;
- an exemption from the requirement to consult with trade unions when surrendering the contracting-out certificate if the scheme is surrendering it on a wind-up;
- a clarificatory amendment to the Scheme Funding Regulations confirming that the requirements in relation to the actuary’s certification of the schedule of contributions will only apply, where the actuary’s power to set the scheme’s contribution rate is “only exercisable in a given set of circumstances”, if the given set of circumstances exists;
- removing transitional provisions on employer-related investment from the Investment Regulations, to ensure the UK rules comply with article 18(1)(f) of the IORP directive; and
- exempting schemes from the minimum requirements for member nominated trustees or directors if there are two or more trustee companies and at least one of them is independent (for background on the member nominated trustees and directors regime see EPB briefing 158).
The consultation on these draft regulations closes on 30 January 2009 with the intention that most changes will come into force on 6 April 2009.