Pensions legislation and case law update: week ended 11 February 2022
GMP Conversion Bill passes Committee stage
The Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill 2021-22 has passed the House of Commons Committee stage and is due to go through the report stage and have its third reading later this month on 25 February 2022.
This is the Bill which aims to clarify and amend the guaranteed minimum pension conversion legislation. So far, it has received cross-party support and Guy Opperman, the Pensions Minister, has confirmed that there will be a 'full consultation among industry', following which there will be regulations which will be the subject of Governments debate – see our Insight for more information on the Bill, here for the committee stage transcripts, and here for the 9 February 2022 research briefing paper.
Norton Motorcycles - former owner admits illegal pension investments
Mr S Garner, the former owner of Norton Motorcycles, has admitted investing money from the three DC pension schemes to which he was appointed sole trustee into the employer business in breach of Regulation 12(2) of the Occupational Pension Schemes (Investment) Regulations 2005.
Subject to limited exceptions, it is a criminal offence to invest more than 5% of the current market value of a scheme's resources in employer-related investments. The maximum penalty is an unlimited fine and/or up to two years in prison.
Mr Garner will appear in Court on 28 February 2022 for sentencing.
Latest PPF 7800 Index Report shows funding has increased
The PPF 7800 Index Report setting out the estimated funding position on a section 179 basis as at the end of January 2022 of the eligible 5,215 DB schemes shows that:
- The aggregate surplus of these schemes increased over the month to £146.4bn from a surplus of £129.3bn at the end of December 2021;
- The funding ratio increased from 107.7% at the end of December 2021 to 109.1% at the end of December; and
- The aggregate deficit of the schemes in deficit decreased to £80.9bn from £97.0bn at the end of December 2021.
Auto-enrolment: DWP publishes earnings trigger and qualifying earnings band for 2022/23
The DWP has published the outcome of its statutory annual review of the automatic enrolment earnings trigger and qualifying earnings band. For the 2022/23 tax year:
- the earnings trigger will remain fixed at £10,000; and
- the lower and upper end of the qualifying earnings band will remain at the same level, £6,240 and £50,270 respectively.
The decision to keep the earnings trigger at £10,000 means that an additional 17,000 people will be brought into the auto-enrolment regime. It reflects the Government wish to strike the right balance between affordability and the policy objective of allowing individuals to save a 'meaningful level of savings' whilst also providing 'stability' during the economic uncertainty caused by the pandemic.
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