New Regulations coming into force 6 April 2018 The Government has published its responses to a number of pensions consultations. Final form Regulations in relation to each of these consultations have also been made available. The Regulations are currently before Parliament and it is anticipated that they will come into force 6 April 2018. • Bulk transfers without consent to schemes that have never been contracted out Click here to access the Government's response to the consultations on bulk transfer without consent to schemes that have never been contracted out, and click here to view the final form Regulations. The Regulations allow bulk transfers of contracted-out rights in certain circumstances without member consent, to schemes that have never been contracted out. • DC bulk transfers Click here to access the Government's response to the consultation on DC bulk transfers without consent, and here to view the final form Regulations. The regulations simplify the bulk transfer of occupational DC benefits without member consent, and remove the requirement to obtain an actuarial certificate for such bulk transfers. • Amendments to the Employer Debt Regulations Click here to access the Government's response to the consultation on amendments to the Employer Debt Regulations, and here to view the final form Regulations. In particular, the Regulations introduce a new option that will enable employers, with trustee agreement, to defer the requirement to pay an employer debt in certain circumstances. • Disclosure of charges and transaction costs Click here to access the Government's response to the consultation on costs, charges and investments in DC occupational pensions, and here to view the final form Regulations. The Regulations bring into force various requirements for trustees and scheme managers to publish cost and charge information, and provide members with investment information on request. Although the Regulations are expected to come into force in April, schemes will have a period of time following that in which to publish the required information. Government response to the Taylor Review: auto-enrolment and the self-employed In its response to the Taylor Review of Modern Working Practices, the Government has expressed a clear commitment to improving transparency of entitlement amongst the self-employed. Alongside the response, a number of consultations have been launched, including one that looks at employment status and how the law in this area can be made clearer so that "fewer 'workers' find themselves fighting for protections that they should already have". The Government goes on to recognise that the current framework for automatic enrolment cannot simply be extended for the self-employed and confirms the need for "collaboration and innovation". This might include, as recommended in the Taylor Review, making use of opportunities presented by digital platforms and the move to more cashless transactions. The development of policy in this area is still at an early stage but it is clear that the Government wishes to reinforce existing law rather than bring about sweeping change. You can click here to access the consultation on employment status, which closes 1 June 2018. Employers should be aware of policy developments in relation to the self-employed and consider, at an early stage, the impact any legislative change may have on their business. Pensions Regulator publishes report on British Steel Pension Scheme restructuring The Regulator has published a report on a Regulated Apportionment Arrangement ("RAA") that it approved (and provided clearance for) in relation to the British Steel Pension Scheme ("BSPS"). Proposals for a successor scheme were made at the same time as the RAA, and BSPS members were given the choice of joining this as an alternative to PPF entry (it was projected that most members would receive better benefits under the successor scheme than under the PPF). Under the RAA, Tata Steel made a £550 million payment and provided a 33% shareholding in Tata Steel UK. These assets will be divided between the PPF and the successor scheme, with the exact allocation depending on the eventual member uptake for the successor scheme. In exchange, the BSPS has been allowed to pass into the PPF, and its sponsor, Tata Steel UK (which had to show that, without the RAA, it would have become insolvent within 12 months), has been able to continue trading. The RAA is of particular technical interest because BSPS held a valuable contingent asset in the form of shares in Tata Steel Netherland BV which the Regulator says "strengthened the trustee's negotiating position". It is thought that these shares were the reason that the £550m (which was paid upfront and in full) was "significantly more" than the estimated return to the BSPS on the insolvency of Tata Steel UK. Whilst the report does not directly comment on reports that BSPS members received questionable financial advice in relation to pension transfers, the Regulator commented that it "urged the trustee to talk to members about the importance of obtaining independent financial advice, and asked them to give out our pension scams leaflet when sending out other communications about their decision". A Work and Pensions Select Committee report considering the BSPS financial advice issue can be found here. Trustees should be aware of the early steps they can take to strengthen their negotiating position on the insolvency of an employer. The Tata case is also a reminder to employers with significant pension liabilities that an RAA is a potentially valuable option which should be explored prior to any insolvency. TPAS to merge with the Pensions Ombudsman The Pensions Advisory Service's ("TPAS") dispute resolution function will move to the Pensions Ombudsman with effect from 1 April 2018. The Ombudsman has said that the transfer "will simplify the customer journey" resulting in a smoother, improved complaint handling service. Currently, members may approach both the Ombudsman and TPAS for help when dealing with a pension complaint, although typically TPAS tends to focus on complaints before the pension scheme's internal dispute resolution procedure ("IDRP") has been completed whereas the Ombudsman deals with complaints that have already been through IDRP. After the merger, members will be able to access all pension dispute resolution (whether before or after IDRP) in one place. Further details of the merger can be found on the Pensions Ombudsman website. Trustees and employers should consider reviewing employee communications to ensure these are updated to take into account the merger. Fines for auto-enrolment failures Stotts Tours (Oldham) Limited and the company's director, Alan Stott, have been fined over £60,000 after they pleaded guilty to deliberately avoiding giving staff a workplace pension. The £60,000 of fines were in addition to £14,400 in civil fines that Stotts Tours already owe for failing to comply with the law on automatic enrolment. The case is significant because it is the first time that the Regulator has prosecuted for failing to comply with the law on workplace pensions. The Regulator commented that "this case shows the cost to employers that failing to comply with automatic enrolment can bring – a bill of tens of thousands of pounds, a criminal conviction and a damaged reputation". The case is a reminder to employers that the Regulator takes a strict approach in relation to auto-enrolment, and employers should ensure that they are on top of their auto-enrolment obligations. Any non-compliance (no matter how small) should dealt with immediately. Pensions Disputes News First ever restitution orders in relation to pension scams Four people have been ordered by the High Court to repay £13.7 million taken from pension scheme members over a two-year period. Hundreds of individuals were persuaded to transfer their pension savings into one of 11 scam schemes operated by Friendly Pensions Limited after they were told that they would receive a taxfree payment as a result of investments made by the scam pension scheme. The Regulator, who sought the court order, commented that the "defendants siphoned off millions of pounds from the schemes on what they falsely claimed were fees and commissions…This left hardly anything behind from the savings their victims had set aside over decades of work to pay for their retirements". Dalriada Trustees, who were appointed by the Regulator to take over the running of the scam schemes, will now be able to seek the confiscation of the scammers' assets. Employment Appeal Tribunal rules on age discrimination cases The Employment Appeal Tribunal has ruled on two different age discrimination cases (Ministry of Justice v McCloud and Sargeant v London Fire and Emergency Planning Authority) which concern the introduction of public sector career average pension schemes to replace the current defined benefit arrangements. In both cases, the effect of transitional provisions introducing the career average plans was that oldest members continued to be entitled to active DB membership on current terms until retirement (or, if younger, for a specified period of time), whereas the youngest members had no such entitlement. It was common ground in both cases that the youngest members had been treated less favourably than older members. Consequently, the appeal cases related to the Government's "objective justification" (i.e. whether the different treatment was a proportionate means of achieving a legitimate aim) for treating older member differently from younger members. In McCloud, the Employment Tribunal found that the Government's claimed legitimate aim (of protecting members closer to retirement from the effect of the pensions reform) was not valid, in particular, because older members would in fact be less affected by the reforms than younger members. However, in Sargeant, a separate tribunal found that the Government had validly established a legitimate aim. The Employment Appeal Tribunal's decision in McCloud confirmed that the Employment Tribunal took too strict an approach in this case because it did not consider the fact that the Government had a right to take into account various moral and political reasons when establishing its legitimate aim. However, given the severe impact the measures would have on younger members' pensions, the legitimate aim pursued was not proportionate. In Sargeant, the Employment Tribunal also failed to sufficiently scrutinise the proportionality of the legitimate aim. Sargeant was therefore sent back to the Employment Tribunal for further consideration. We understand that both cases will be appealed. Employers and trustees should be aware of possible age discrimination claims following any change in benefit design that might affect one group of members more than another. High Court rules in favour of Wedgwood Employers The High Court has decided in Wedgwood Pension Plan Trustee Limited v Salt that notices served by participating employers to terminate their liability to contribute to a scheme were effective. Whilst Rule 62 of the Wedgwood Plan's 2001 Rules allowed employers to terminate their liability to contribute to the Plan by giving written notice, this rule had replaced Rule 48 of the 1995 Rules which only allowed an employer to leave the Plan where it was "impracticable or inexpedient" for the employer to continue participating in the Plan. The Court had to decide whether Rule 48 had been validly replaced under the Plan's amendment power which provided that "no alteration modification or addition shall be made which shall prejudice or adversely affect any pension or annuity then payable or the rights of any member". The Court confirmed that the "rights of a member" were the rights which had accrued to members as a result of past service only, and were not rights to future benefits. This meant that Rule 62 was capable of closing the Plan to future accrual. Rule 62 could not, however, remove the condition that an employer can only leave the Plan where it is "impracticable or inexpedient" to continue participating in the Wedgewood Plan (not to include this condition would offend the amendment power as it would "prejudice or adversely affect" members). Whilst this did not invalidate Rule 62 it did make the provision subject to an implied limitation that it would only be used if the exiting employers met the impracticable or inexpedient condition, which the Court found they had. The case is a reminder that employers and trustees should closely consider the wording of a pension scheme's amendment power when making any change to its rules.