Round-up of pensions developments: May 2016

Page 1 PENSIONS E-BULLETIN ROUND-UP OF PENSIONS DEVELOPMENTS: MAY 2016 Welcome to the latest edition of HSF’s Pensions E-Bulletin – our monthly round-up of pensionsrelated legal developments. This month sees another bumper edition. We look first at the new EU data protection regime (“20 million Euro fine, anyone?”) and the potential compliance burden that it will undoubtedly foist upon UK pension schemes, notwithstanding the referendum vote: there are a mere two years before it takes full effect, and early planning and implementation will be key! Also of undoubted interest will be the Government’s consultation exercise on how best to restructure the British Steel Pension Scheme and thereby separate it from its sponsoring employer – something the Pensions Regulator has been telling us, for well over a decade, that we are not allowed to do. Watch this space further, as this is a political hot potato that is sure to rumble on for some time yet. And then there’s a whole host of interesting court and Ombudsman determinations, on subjects as diverse as rectification via summary judgment; equalisation formalities; VAT on professional advisers’ fees; contractual estoppel; and the extent to which trustees are obliged to take the initiative and tell members when they will be better-off if they act differently. We certainly live in fascinating, albeit challenging, times. Please feel free to pass the Bulletin to a colleague who may be interested, or to suggest that they subscribe for regular editions. And if you have any thoughts on how it might be improved, do let us know. JUNE 2016 London Table of Contents Top of the agenda 1. Data protection – a new regime, and €20m fines for breaching it! 2 2. British Steel – is it right to change the law for one pension scheme? 2 Cases 3. Rectification by summary judgment where wrong version of deed executed 3 4. VAT on professional advisers’ fees - one step forward, one step back 3 5. Lack of consensus between trustees and employer defeats equalisation amendment 4 Legislation 6. Tapered annual allowance – HMRC clarifies what is required, and when 4 Pensions Regulator 7. DC governance – new Code laid before Parliament 4 8. Auto-enrolment – ignore TPR at your peril 5 Pensions Ombudsman 9. Changes to process – the Ombudsman goes virtual and complainants go incognito! 5 10. Pension scheme administrators should have taken “urgent action” to pay death benefits within two-year limit 5 11. Written representation constitutes contractual estoppel 6 12. (Another) successful estoppel argument, and a costs award 6 13. Employer that failed to provide information about transfer deadline in breach of duty 6 14.‘No worse off’ guarantee in pension scheme merger deed can be validly removed for future service 7 Consultations 15. Early exit charges from DC arrangements 7 16. Financial Reporting Council consults on revised “pensions TAS” 8 RELATED LINKS  Herbert Smith Freehills homepage  Pensions and superannuation homepage  Herbert Smith Freehills insights  Employment, pensions and incentives insights ROUND-UP OF PENSIONS DEVELOPMENTS: MAY 2016 HERBERTSMITHFREEHILLS Page 2 Top of the agenda 1. Data protection – a new regime, and €20m fines for breaching it! The new EU General Data Protection Regulation (GDPR) which came into force on 25 May this year will introduce, from May 2018 (and notwithstanding the referendum vote), a significantly-heightened data protection regulatory regime that includes:  more information to be given to data subjects, and a tightening-up of the requirement that consent to data processing be freely-given, specific, informed and unambiguous;  data processors on the hook for regulatory breaches for the first time – no longer will it be possible to avoid censure by virtue of not having been a “data controller”;  a requirement to notify the regulatory authority, and affected data subjects, of any breach within 72 hours of it coming to light – a significant additional compliance burden;  mandatory appointment of a named “data protection officer” by organisations processing high volumes of sensitive personal data; and  sanctions for breach of up to €20m (or 4% of worldwide annual turnover if greater). Which by anyone’s standards is an awful lot of money. Comment: Pension scheme trustees are likely to be caught by all of these new provisions, including that requiring a named Data Protection Officer to be appointed: significant additional compliance burdens can be expected as of two years hence. Whilst there is not yet any ‘flesh on the bones’ of the new regime – for which we await domestic regulations, to be made by Government over the course of the next 24 months – early planning is essential to ensure full compliance as from May 2018.  Back to top 2. British Steel – is it right to change the law for one pension scheme? DWP is consulting on several options for restructuring the British Steel Pension Scheme. This includes the possibility of removing the restrictions on detrimental modifications of members’ accrued rights contained in s67 of the Pensions Act 1995. There is also a suggestion of legislative change to allow the accrued benefits in the Scheme to be moved to a (less generous) newly-established scheme in a bulk transfer, most probably without obtaining members’ consent. The new, relaxed “bulk transfer without consent” option would not just be available to this scheme, but would potentially apply to any very large scheme (100,000+ members, according to DWP) where obtaining individual member consents would be impractical. It would, Government says, be subject to requisite safeguards to prevent abuse in the future by others who wish to take advantage of it. To permit a transaction along these lines to proceed, amendments would also have to be made to the social security legislation to allow a transfer from a formerly contracted-out scheme to a scheme that had never been contracted-out – a ‘disconnect’ in the legislation since April of this year which we are aware is already troubling a number of large employer groups. The inability to make a without-consent bulk transfer was also, it is worth noting, the reason that the rescue package for the Halcrow Pension Scheme (covered in our separate Bulletin earlier this month) was unable to be implemented. Conundrum: Halcrow also provided a stark illustration of the fact that, following a restructuring of the type now proposed for the British Steel scheme, reducing headline benefits below their current level might actually be in most members’ favour by comparison with (i) unreduced headline benefits coupled with (ii) an immediate insolvency and a reduction in benefits to PPF compensation levels. The difficulty, of course, is assessing the likelihood of that insolvency taking place, which can only be done accurately with the benefit of hindsight (by which time it will, of course, be too late to do anything about it). And there will always be exceptions to any rule: members in receipt of temporary ‘bridging pensions’, for example, have the full amount treated as part of their core entitlement from the scheme (i.e. no account is taken of the fact that it would only have been paid until state pension age had the scheme not failed) and might, therefore, be better-off in the PPF – which will pay a bridging pension until a member’s death – than under a restructuring of the kind proposed. Comment: Government appears to have opened up something of a hornets’ nest with this consultation, which has generated large-scale adverse comment across the pensions industry. The general tenor of opinion seems to be based on the contradiction between, on the one hand, parliamentary calls for increased regulation to prevent employers “separating” their occupational pension schemes (in the manner alleged to have taken place with, for example, the BhS scheme) and, on the other, DWP’s desire to change the rules where even the existing level of regulation is sufficient to prevent a restructuring with undoubtedly meritorious objectives but, at the same time, an adverse impact on the DB pension scheme of the employer concerned. We too find it difficult to square the British Steel consultation with the Commons Select Committee’s position on BhS. We also note, from a wider perspective, the proposals mooted by its Chair (the Rt Hon Frank Field MP) for an overarching review of DB pension scheme affordability, something we imagine the industry would wholeheartedly welcome.  Back to top ROUND-UP OF PENSIONS DEVELOPMENTS: MAY 2016 HERBERTSMITHFREEHILLS Page 3 Cases 3. Rectification by summary judgment where wrong version of deed executed: Girls Day School Trust v GDST Pension Trustees Ltd [2016] EWHC 1254 (Ch) Summary judgment has been given in the Girls Day School Trust case. The parties involved had executed the wrong version of a deed (various drafts having been circulated by email during the course of its preparation, one of which was then signed). Rectification was sought so as to give the document its intended meaning, on the basis of the parties’ “objectively demonstrable, continuing common intention”. Judgment was given on a summary basis as it was considered unarguable that a trial would have resulted in a different result. Comment: This is the second occasion this year on which rectification has been sought, and granted, via the route of summary judgment (the first being Hogg Robinson v Harvey [2016] EWHC 129 (Ch)). It also bears considerable similarity to the issues raised by Re BCA Pension Plan [2015] EWHC 3492, which was dealt with by an application under section 48 Administration of Justice Act 1985. Action points: The judgment in Girls Day School Trust also highlights two fundamental practical points for those involved with the preparation of deeds:  Immediately upon receipt of an executed deed, check it has been signed by everyone who is supposed to have signed it.  At the same time, and particularly if earlier versions have been circulated to clients for review (and/or the deed is being executed in counterparts), check too that the correct version has (or “correct versions have”) been signed. And something to ponder: An interesting takeaway for those considering an application for rectification on a summary basis without a public hearing, where (as is increasingly common) clear mistakes regarding the drafting or execution of a document come to light, is the judge’s view about the privacy to be afforded to the court file and supporting evidence. A theme in this case had been the concern about “deals done in dark corners”. A further theme had been clear sensitivity about the content of one particular report that was relevant to the hearing but which had not been prepared for a wide public audience. The judge went on to make it clear that, in future, parties who essentially apply to the court for rubber-stamping of rectification cases “must understand it is likely that the Court will insist that, after judgment, all evidence be open to inspection”; and he sounded a warning that – to the extent that would be unacceptable – the application would most likely be the subject of a full public hearing. Whether this is a wider judicial attempt to ‘clip the wings’ of the increasing trend towards seeking rectification on a summary basis, or simply the personal views of one particular member of the judiciary about the extent to which parties should be spared the embarrassment of having their dirty laundry aired in public, remains to be seen…  Back to top 4. VAT on professional advisers’ fees - one step forward, one step back: Airtours Holidays Transport Ltd v Revenue & Customs [2016] UKSC 21 As trailed in last month’s Bulletin the Supreme Court has dismissed the employer’s appeal in Airtours and held that the company was not entitled to deduct input tax from the fees that it had paid under a tripartite agreement because, on a proper construction of that agreement, it had not been the recipient of the supply of services. Whilst the decision supports HMRC’s views that tripartite agreements are a potential solution to the “pension fund VAT reclaim” conundrum, it does also highlight one of the difficulties associated with such a structure. Back in the mists of time, Airtours were suffering serious financial difficulties and PwC were commissioned to produce an accountants’ report to satisfy the many institutions from which the company had borrowed money. The terms of PwC’s appointment were that Airtours would pay PwC’s fees for producing the work, which was provided directly to the financial institutions. Airtours also paid VAT on those fees, and then sought to deduct that VAT as input tax in its own VAT returns for the relevant periods. HMRC in turn challenged Airtours’ ability to do this. While HMRC accepted that the report was of commercial benefit to Airtours, they contended that it was not entitled to reclaim the VAT on PwC’s fees because the accountants’ services under the contract were not “supplied to” Airtours. The court found that PwC were under a contractual commitment to the creditor institutions and not to Airtours. As domestic and European judgments make clear, where the person who pays the supplier is not entitled under the contractual document to receive any services from the supplier, then, unless the documentation fails to reflect the economic reality (which was not the case here), the taxpayer has no right to reclaim by way of input tax the VAT it has paid. Comment: This decision is of potential relevance to the ongoing saga concerning the reclaim of VAT on professional advisers’ fees incurred by pension trustees that are paid by the employer, not least because tripartite agreements remain one of HMRC’s favoured ways forward and support is given to their stance by the decision in Airtours. This is despite the pensions industry’s ROUND-UP OF PENSIONS DEVELOPMENTS: MAY 2016 HERBERTSMITHFREEHILLS Page 4 view that if services are contractually required to be provided to the employer in order to allow a VAT reclaim to take place, a clear conflict then arises due to the professional adviser’s retainer being first and foremost with the trustees of the scheme and not the employer. More is expected from HMRC on this subject during the summer. One can only hope that, whatever they produce, it will be sufficiently in advance of the end of the transitional period on 31 December to allow the industry to respond properly, and to adjust its practices accordingly without any need for undue haste.  Back to top 5. Lack of consensus between trustees and employer defeats equalisation amendment: Bett Homes Ltd v Wood [2016] CSIH 26 The Scottish courts, hitherto less hamstrung by documentation formalities than their English counterparts, have held that the correct procedures were not followed when making an amendment to a scheme’s trust deed and rules to equalise pension ages between men and women in order to reflect the ECJ’s decision in Barber v Guardian Royal Exchange. The scheme had long been administered by its trustees as if the change had taken place with effect from January 1993. However, difficulties associated with the finer points of members’ benefit entitlements subsequently arose due to the lack of documentary evidence concerning the introduction of these two changes. The court held that a “special terms” clause (permitting member-specific augmentations on an informal basis) was not an appropriate route by which to effect a benefit equalisation exercise. There had, in particular, been no evidence of the trustees’ consent to the change. The “mere fact” that the trustees were copied-in to a letter to members did not allow an inference to be drawn that the requisite formalities of the trust deed and rules had been complied with; and, as a consequence, the purported amendment failed. Comment: This case is a further example of the Scottish courts advising on the interpretation of historic equalisation attempts – a problem, it seems, that afflicts both sides of Hadrian’s Wall in equal measure. Most notably, in Low and Bonar v Mercer it was held that focus should be on the substance of what was done, rather than the technical form of how it was achieved. However, that decision was said to be of ‘limited assistance’ to the present case, which suggests that the Scottish courts are (like their English counterparts) now prioritising the importance of correct procedure when determining equalisation-related claims and disputes.  Back to top Legislation 6. Tapered annual allowance – HMRC clarifies what is required, and when HMRC’s Pension Schemes Newsletter 78 helpfully clarifies some uncertainties stemming from legislative changes made back in April and confirms that the position regarding “pension savings statements” remains unchanged. In particular, a scheme administrator is required to provide a standard pension savings statement to a member only if that member’s pension input amount for that scheme exceeds the general untapered annual allowance (currently £40,000). Furthermore the Newsletter clarifies that, for 2016-2017 onwards, individuals who are subject to the tapered annual allowance are not prevented from using “mandatory scheme pays” and may still do so providing their annual allowance charge for the tax year exceeds £2,000 and the pension input amount for the registered pension scheme for the tax year exceeds the general untapered annual allowance.  Back to top Pensions Regulator 7. DC governance – new Code laid before Parliament TPR’s ‘Code of Practice no. 13: Governance and administration of occupational trust-based schemes providing money purchase benefits’ was laid before Parliament on 9 May and is anticipated to be given full legal effect during July. Also on 9 May, TPR published its formal response to the consultation on the draft Code. The consultation response highlights the changes made to the Code as a result of feedback received during the consultation process. ROUND-UP OF PENSIONS DEVELOPMENTS: MAY 2016 HERBERTSMITHFREEHILLS Page 5 The Code is predominantly in the form on which it was consulted, and addresses a wide variety of matters relating to DC governance including:  proper operation of the trustee board;  scheme management skills such as assessing and monitoring risks, managing relationships with service providers, working effectively with the scheme’s employers and dealing with conflicts of interest and duty;  scheme administration;  investment governance;  value-for-money; and  ensuring that member communications are always timely and appropriate. Risk warnings have however been given greater prominence, as the Regulator expects trustee boards “to ensure that communications containing risk warnings clearly articulate the risks associated with each of the different options available to the member, and clearly draw the member’s attention to those risks”. Each section of the Code will be accompanied by a “how to” guide, on which the Regulator’s consultation exercise concluded during May. These will give practical guidance about the regulatory requirements laid down in the Code itself, and are intended to help separate the twin concepts of (i) mandatory legal requirements and (ii) guidance as to best practice, a distinction not previously felt to have been clearly drawn by the Code itself. The guides will also be “faster-moving” than the Code itself as they will be capable of amendment without parliamentary involvement, and therefore more adaptable to changing circumstances and/or specific practical matters that the Regulator finds itself concerned with.  Back to top 8. Auto-enrolment – ignore TPR at your peril In a matter which the inimitable John Motson would have described with the words “And it’s… it’s… and the referee has given a penalty to Swindon! Would you believe it…”, the Pensions Regulator has published a “section 89 report” explaining how it exercised its regulatory powers in respect of the circa £22,000 fine received by Swindon Town Football Club for auto-enrolment non-compliance. The report details the timeline of events, the regulatory action taken and provides a summary of the fines paid. Action point: The report illustrates the need for employers to engage early where non-compliance has been identified; had Swindon Town FC responded immediately to the Regulator’s initial contact and taken swift action it could have avoided the penal financial penalties imposed. It was the continued lack of response from the club that led the Regulator to pursue sanctions as opposed to simply focusing on remedial action.  Back to top Pensions Ombudsman 9. Changes to process – the Ombudsman goes virtual and complainants go incognito! Hot on the heels of the recent announcement that (in the interests of efficiency) complaints to his office may now be submitted online, the Pensions Ombudsman has indicated that he will now be anonymising all published decisions by removing the applicant’s name and any other identifying data which is not necessary for understanding the decision. Also noteworthy is the fact that opinions issued by the Ombudsman’s adjudicators will also now be published if they are appealed to the Ombudsman or are simply considered to be of interest in themselves. Adjudicators deal with the more cut-anddried cases that the Ombudsman determines are suited to the fast-track procedure introduced a couple of years ago that is designed to reduce the time taken to reach decisions and thereby allow resource to be concentrated on those more difficult or legally complex complaints.  Back to top 10. Pension scheme administrators should have taken “urgent action” to pay death benefits within twoyear limit: Lettman v London Borough of Hammersmith & Fulham [PO-3753] The Pensions Ombudsman has given his determination in the case of Lettman. He held that a Local Government Pension Scheme administering authority should have informed the mother of a deceased member, from whom information was being sought to allow a proper distribution of lump sum death benefits to take place, of the statutory two-year time limit to prevent the payment being unauthorised for tax purposes. Further, the Ombudsman held that the administering authority should have acted urgently whilst there was still time left to settle the death grant within that two-year period. ROUND-UP OF PENSIONS DEVELOPMENTS: MAY 2016 HERBERTSMITHFREEHILLS Page 6 Comment: This case is of practical importance for a number of reasons. First, it shows the significant consequences of missing the two-year time limit for paying authorised lump-sum death benefits. And secondly, although the Ombudsman did not go so far as to confer a duty on pension scheme administrators, it was held that a failure to volunteer the information regarding the time limit amounted to maladministration. Contrast this with the recent decision in Mayo v Kodak Pension Plan which we covered in last month’s Bulletin. In that case it was held that a trustee or employer is not under a duty to tell a member of its pension scheme that it might be to his or her financial advantage to exercise their pension rights differently. The two different determinations offer inconsistent guidance for administrators and trustees although they can potentially be squared by the fact that Lettman, and Cherry v Police & Crime Commissioner for South Wales before it, both concerned taxation and the respondent’s failure to inform a beneficiary of the significant implications of acting, or not acting, in a particular manner.  Back to top 11. Written representation constitutes contractual estoppel: Butterworth v Police & Crime Commissioner for Greater Manchester [PO-6773] The Pensions Ombudsman has held in favour of a former employee of the Greater Manchester Police Authority (GMPA). In 2008 the claimant received a letter from the GMPA highlighting the offer of a new role within the Authority and the opportunity to “retire early with maximum augmentation”. However, in 2011 the relationship between the claimant and the GMPA broke down to such an extent that her employment was terminated and a compromise agreement was entered into, which granted the claimant an entitlement to an unreduced pension payable from age 55. The Ombudsman dismissed the claim made by reference to the 2008 offer letter. However, he held that a contractual estoppel had arisen via the 2011 compromise agreement. It contained not a mere representation, but a contractual term that conferred a valuable right on Mrs Butterworth. The GMPA was estopped from avoiding liability arising out of the promise it conferred, and it followed that Mrs Butterworth was entitled to receive an unreduced pension from age 55 (and that the Authority must provide it).  Back to top 12. (Another) successful estoppel argument, and a costs award: Mrs K v Department for Education / Teachers Pension Scheme [PO-3471] Mrs K, a former head teacher, had complained that the method used to calculate her retirement benefits resulted in a smaller pension and lump sum that she had planned for and was expecting. Mrs K argued that she was given misleading information about her pension, which she relied upon to her detriment. The Ombudsman upheld the complaint and found in favour of Mrs K. In his summary, the Ombudsman concluded that Mrs K had undertaken considerable research herself, including the hiring of professional legal services, had entered into protracted correspondence with the scheme and relied on the advice of it, and her employer, to her detriment. It was held that an estoppel had arisen; it was shown that Mrs K was under no compulsion to leave her post when she did, and that she could and would have remained in her position until she reached pensionable age had she known what her true pension entitlement would have been. The Ombudsman determined that Mrs K should be credited with pensionable service for the period that she would have worked had she not been given incorrect information. Further, Mrs K was awarded £1,000 for the considerable distress and inconvenience she suffered as a result of a new argument that the respondents introduced in 2015, several years after the dispute began. Finally, in a comparatively rare move by the Ombudsman, Mrs K was awarded a total of £1,200, inclusive of VAT, for the legal costs she incurred. Comment: Whilst an award for legal costs is not normally made in Ombudsman disputes, the misinformation Mrs K received sent her “down a different path” which required her to incur “unnecessary legal expenses which should be reimbursed”. The Ombudsman’s decision is also interesting in that it contained a successful argument for estoppel, a compensatory sum for distress at the top end of the spectrum and an award for legal costs – all relative rarities in the world of the Ombudsman.  Back to top 13. Employer that failed to provide information about transfer deadline in breach of duty: Bennett v Department of Health / NHS Pension Scheme [PO-7182] The Pensions Ombudsman has held that an employer’s failure to inform an employee of the 12-month time limit to transfer in benefits on enhanced terms amounted to a breach of its implied duty under Scally v Southern Health and Social Services Board [1992] 1 AC 294. ROUND-UP OF PENSIONS DEVELOPMENTS: MAY 2016 HERBERTSMITHFREEHILLS Page 7 Ms Bennett had previously worked for the NHS, joined its pension scheme and been given a members’ booklet that stipulated the deadline applying to transfers-in. After a period of employment elsewhere she rejoined the NHS but was not given that information a second time. She subsequently sought to transfer her other benefits into the NHS scheme but was denied the enhanced terms. The Ombudsman upheld the complaint against Ms Bennett’s employer, on the basis that (in line with Scally) an employer has a contractual duty to take reasonable steps to inform employees of a contractual term in order for them to take advantage of it, where the following conditions apply:  the terms of the contract have not been negotiated with the individual;  the particular term in question makes available a valuable right contingent upon the individual taking action to avail himself of it; and  the employee cannot, in all the circumstances, reasonably be expected to be aware of the term unless it is drawn to his attention. The Ombudsman felt here that it was unreasonable in particular to expect Ms Bennett to remember one sentence from a pension scheme booklet she had received 6 years previously. Comment: This dispute is a rare example where a court or tribunal has found that the narrow Scally criteria have been fulfilled. It is also unusual to find the Ombudsman departing from the general principle that those involved with pension schemes are under no duty to volunteer information to members, over-and-above what is required by statute. However Bennett does seem to sit neatly alongside the similar approach now being taken by the Ombudsman where the tax implications of a member’s decision are concerned, as illustrated by other recent decisions referred to above.  Back to top 14. ‘No worse off’ guarantee in pension scheme merger deed can be validly removed for future service: Mrs X v Kingfisher Pension Scheme [PO-4280] The Pensions Ombudsman held it was permissible to close an occupational pension scheme to future accrual and thereby remove a guarantee that transferees into that section would receive benefits at least as good as those in their original scheme. Mrs X was a member of the B&Q scheme that was merged into the Kingfisher scheme in 1988, following which merger the guarantee was included in the new scheme’s governing rules. When the Kingfisher scheme closed to future accrual Mrs X became a deferred member, with the result that her future service accrual was – by definition – less generous than had the scheme remained open. Her past service benefits were calculated by reference to the guarantee, however. The Ombudsman dismissed any argument based on contractual entitlement (by virtue of the guarantee) or on breach of legitimate expectation. He suggested that Mrs X’s argument seemed more akin to one of estoppel or change of position rather than an issue of construction, but noted the problems associated with demonstrating an estoppel and referred to various decided cases to support his conclusions. He also held on the facts that a modification of the scheme’s deed and rules was not a regulated modification and, therefore, if there was a power to modify contained within the scheme rules then “the trustees or the employer, or both, whoever can validly exercise that power, may make the modification”. Comment: Considering the widespread historic use of no-worse-off guarantees on scheme mergers, this case will be of much interest. As was clear in this case the main issue in such a dispute is whether the wording of the guarantee provides (or at least allows) for amendments to be made at a future date. It is suggested that a provision so stringent as to disallow any future service changes would be highly unlikely to exist, at least not intentionally; but the precise wording will without exception be paramount.  Back to top Consultations 15. Early exit charges from DC arrangements On 26 May the FCA launched a consultation paper that proposes a 1% cap on exit charges in existing contract-based personal pensions (and a 0% cap for new PPs). The consultation is open until 18 August 2016. The DWP has also published a consultation on early exit charges, specifically on the proposal to introduce a similar cap where members of occupational pension schemes seek to access their benefits flexibly. They are also seeking views on the definition of the ‘market value adjustments’ which will be excluded from the FCA cap. The consultation will remain open until 16 August 2016. ROUND-UP OF PENSIONS DEVELOPMENTS: MAY 2016 HERBERTSMITHFREEHILLS Page 8 Finally, the Pensions Regulator has published a survey on exit charges from occupational DC schemes that apply to the funds of members aged 55 and over. The survey revealed that only 1% of participating schemes applied an exit charge through the scheme’s trustees or in-house administration function whereas 2% reported that an exit charge was applied by the external administrator. Back to top 16. Financial Reporting Council consults on revised “pensions TAS” The FRC has published three consultation documents which set out a proposal to replace the generic pensions Technical Actuarial Standards with a single TAS. ‘TAS 300’, one of the consultation documents which sets out the specific standards applicable to pensions work, covers four broad areas of actuarial work:  funding or financing of private and public sector pension schemes;  the derivation of actuarial factors used to calculate benefits such as transfer values, lump sums at retirement and early retirement pensions;  supporting incentive exercises such as enhanced transfer value (ETVs) or pension increase exercises (PIEs); and  work for governing bodies concerning changes which may affect members’ benefits from bulk transfers or modifications of accrued benefits. The consultations are seeking feedback on whether the scope of the work detailed in TAS 300 is appropriate for this particular standard, and whether the FRC has chosen the correct work to exclude from TAS 300. The consultation remains open until 5 August 2016.  Back to top ROUND-UP OF PENSIONS DEVELOPMENTS: MAY 2016 HERBERTSMITHFREEHILLS Page 9 Contacts Daniel Schaffer (Partner) T +44 20 7466 2003 daniel.schaffer@hsf.com Alison Brown (Partner) T +44 20 7466 2427 alison.brown@hsf.com Samantha Brown (Partner) T +44 20 7466 2249 samantha.brown@hsf.com Kris Weber (Professional support lawyer) T +44 20 7466 3407 kris.weber@hsf.com If you would like to receive more copies of this briefing, or would like to receive Herbert Smith Freehills briefings from other practice areas, or would like to be taken off the distribution lists for such briefings, please email subscribe@hsf.com. © Herbert Smith Freehills LLP 2016 The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on the information provided herein.  Back to top