In this issue
TPAS announces 5 stages to
New financial adviser directory set to
HMRC updates individual protection
HMRC guidance on "fit and proper
Pensions Regulator adds three new
questions to scheme returns for DB
and hybrid schemes
GAD accepting applications for broad
comparability passports as against
The Pensions Regulator agrees a
£184m settlement in relation to the
Lehman Brothers pension scheme
NEST pension saving limits to be
Article on recent changes to minimum
pension rights on TUPE transfers
This newsletter is for information
purposes only. Its contents do
not constitute legal advice and
should not be regarded as a
substitute for detailed advice in
If you wish to discuss any of these
issues further, please contact your
usual Baker & McKenzie lawyer.
TPAS announces 5 stages to "guidance guarantee"
The Treasury announced on 21 July 2014 that the responsibility for delivering
the Government's "guidance guarantee" on retirement had been jointly
awarded to The Pensions Advisory Service (TPAS) and the Money Advice
Service (MAS). Michelle Cracknell, the TPAS chief executive, has confirmed
that this guidance will be delivered under a new single national brand.
Michelle Cracknell also suggested that the guidance would involve a five stage
process. First, providers would need to give a "short and snappy and very
clear" message so people are encouraged to take up the option of guidance;
secondly, the member would need to book an appointment; thirdly, the
member would need to do some basic preparation ahead of their appointment,
which may be delivered face-to-face, over the phone or online; fourthly, the
guidance itself would be delivered and; finally, a parting document would be
handed over summarising the session and offering a clear signpost to
regulated, paid-for advice.
The FCA is currently consulting on retirement reforms and the guidance
guarantee and is due to publish the results of this in the final quarter of 2014.
> Back to Top
New financial adviser directory set to go ahead
The Money Advice Service (MAS) has confirmed in a press release that its
proposed financial adviser directory is set to go ahead with the aim for it to be
launched by April 2015 to coincide with the new Retirement Guidance
Service. MAS is now establishing an independent panel which will set out the
criteria for inclusion in the directory. The panel will decide matters such as,
whether the directory will contain only retirement specialists or will also be
open to advisers covering all areas of regulated financial advice and how fees
and charges can be included.
This is likely to be of interest to trustees and companies, who may
receive queries from scheme members as to where they can find an
independent financial adviser, particularly in light of the pensions
changes which are to be introduced in April 2015.
The press release can be viewed by clicking here.
> Back to Top
HMRC updates individual protection 2014 guidance
The window for registration for individual protection 2014 opened on 18
August 2014. The lifetime allowance was reduced from £1.5m to £1.25m from
6 April 2014. Individual protection 2014 gives individuals a protected lifetime
allowance equal to their pension savings on 5 April 2014.
HMRC has updated its guidance, which was first published in December 2013,
to reflect the application process which is entirely on-line. Applications for
individual proection 2014 must be received by HMRC no later than 5
The updated guidance can be viewed by clicking here.
> Back to Top
HMRC guidance on "fit and proper person test"
In order to combat pensions liberation, new powers introduced from 1
September 2014 allow HMRC to refuse to register a new pension scheme
or de-register an existing registered pension scheme in circumstances
where HMRC believes that the scheme administrator is not a "fit and
HMRC has now published guidance on the "fit and proper person" test. The
guidance sets out the non-exhaustive factors that may lead HMRC to
conclude that the scheme administrator is not a "fit and proper person".
These include the scheme administrator: not having sufficient working
knowledge of pensions and pensions tax legislation; previously being involved
in pensions liberation; previously being the scheme administrator of, or
otherwise involved with, a pension scheme which has been de-registered by
HMRC; being involved in tax fraud; having a criminal conviction or being the
subject of adverse civil proceedings relating to finance, corporate bodies or
dishonesty; having participated in or been connected with designing and/or
marketing tax avoidance schemes; being removed from acting as a trustee by
the Pensions Regulator or a Court; being disqualified from acting as a
company director or being a bankrupt; and/or employing as an adviser a
person who has been involved in pensions liberation or tax avoidance.
The last of these points is intended to deal with the situation where an
employer is scheme administrator and, whist not having a detailed knowledge
of pensions and tax legislation, employs an adviser with the appropriate
knowledge. Whilst HMRC accepts that this situation may arise, it will be able
to treat the employer as not being a "fit and proper person" if it employs as an
adviser someone who has been involved with pensions liberation or tax
The guidance can be viewed by clicking here.
> Back to Top
Pensions Regulator adds three new questions to
scheme returns for DB and hybrid schemes
The Pensions Regulator has added three new questions to the scheme return
forms for defined benefit (DB) and hybrid pension schemes. The additional
Schemes in surplus: The Regulator will require the financial
assumptions used to calculate the technical provisions for those
schemes which have declared a surplus as at the most recent Part 3
Value at Risk (VaR) calculations: The Regulator will require the VaR
calculations undertaken by the actuary (and if trustees are not able to
provide VaR calculations, the Regulator will assess the scheme’s
investment risk by reference to the allocation between different asset
classes without any allowance for interest rate, inflation or other types
of hedging that might be in place); and
Asset-backed contribution (ABC) structures: The Regulator will require
information about the structure, valuation and terms of any assetbacked
A new checklist from the Pensions Regulator containing further
information in relation to these questions and the information to be
provided can be viewed by clicking here.
> Back to Top
GAD accepting applications for broad comparability
passports as against PCSPS
This follows on from the Government Actuary's Department (GAD)
announcement in July 2014 of changes to its system for issuing passports.
We reported previously that, in relation to New Fair Deal, the GAD has
announced changes to its system for issuing broad comparability passport
certificates to contractors, to reflect the new guidance and that, from 1 July
2014, GAD will issue a single tier passport, which will be valid for a maximum
of two years.
By way of an update, GAD has now announced that, with effect from 24 July
existing broad comparability certificates issued by GAD against the
Principal Civil Service Pension Scheme (PCSPS) ceased to be valid for
transfers of employment which took place on or after that date
(including where contractual terms have been agreed but the transfer of
staff has not yet taken place); and
GAD will now accept applications for broad comparability assessments
as against PCSPS which take into account the 2015 reforms to
The announcement can be viewed by clicking