Pensions Insight: 14 to 28 May 2024

This insight covers the latest on the McCloud remedy judicial review case, TPR’s data quality blog, an update from TPO on its improvement plans and PASA’s dashboards update.

FBU seeking permission to appeal to Supreme Court on McCloud costs control case dismissal

The Fire Brigades Union has confirmed that it is seeking permission to appeal to the Supreme Court regarding the Court of Appeal’s April 2024 dismissal of its joint judicial review case concerning the validity of Government directions that the costs of implementing the McCloud judgment discrimination remedy should be met through the cost control mechanism (the CCM).

The CCM controls cost changes in public sector pension schemes by modifying members’ benefits and/ or contributions if the cost of future pension provision moves away from a set target. The Government directions attribute the remedy costs as member costs as opposed to employer ones. In dismissing the unions’ grounds for judicial review, the Court of Appeal has upheld the validity of the directions.

TPR blog on the importance of data quality

The Pensions Regulator’s (TPR) recent blog centres on the importance of data quality for both pensions dashboards and defined contribution (DC) value for money (VfM) requirements, noting that “Regulatory compliance is not optional…Failure to meet the deadlines is not an option.”

With this in mind, TPR will be contacting hundreds of schemes to see how they are measuring and improving data and will take enforcement action where schemes do not meet its expectations.

TPR’s update speech of the same date, expands on this initiative setting out TPR’s roadmap (see also its corporate plan) which includes a large-scale initiative regarding smaller schemes compliance with VfM, wider encouragement for schemes to have open data, standards and common protocols and an increased focus on professional trustee firms.

Action: all schemes should regularly assess their data including an annual check as to whether a data review exercise is needed and put in place improvement plans where necessary – good quality data will be essential for dashboards compliance. DC arrangements also need to make sure they are carrying out their VfM assessments and taking relevant action where poor or no VfM is provided.

TPO blog on plans to reduce waiting times and improve service

The Pensions Ombudsman (TPO) Operating Model Review blog confirms TPO’s plans to reduce its waiting times and improve its service over the next 12-18 months. The plans which will span three years form part of the Operating Model Review which started in 2023. During 2024, the focus will be on the following three changes.

1. Resolution Team changes

The circumstances in which the Resolution Team (which provides an early resolution service distinct from the formal TPO determinations process) will look at a complaint will be restricted – complainants will first have to go through the formal complaints process, which for occupational pension schemes is the internal dispute resolution procedure. At present, this is not a requirement for early resolution.

2. Expedited determinations

Short-form decisions and determinations will be used in more cases.

3. Acceptance thresholds tightened

TPO is going to consider whether certain types of complaints would be better handled by other organisations and if a de minimis level should be adopted for certain cases.

“We recognise that achieving this will be a challenge as we are a small organisation with limited capacity but are fully committed to the need to find better ways of working and have re-organised our internal resource to deliver a successful transformation.”

Many involved in TPO complaints in recent times will have noticed delays in the service and improvements on wait times will help all parties involved, not least members for whom delays can have the most impact.

Pensions dashboards: PASA update

PASA’s (The Pensions Administration Standards Association) dashboards update explains that its Dashboards Working Group will be producing the following new guidance and content in 2024.

Action: Schemes in scope should continue with their preparations for dashboards including a project plan for connection by their staging date.