Welcome to your weekly update from the Allen & Overy Pensions team, covering all the latest legal and regulatory developments in the world of occupational pensions.
This week we cover topics such as: Dashboards: draft rules for FCA-regulated pension providers; High Court: EU pensions are protected in case of bankruptcy; Court: no reasonable excuse for EA non-compliance; Final rule on changes to registration requirements for trusts.
- Dashboards: draft rules for FCA-regulated pension providers
- High Court: EU pensions protected in bankruptcy
- Tribunal: no reasonable excuse for EI non-compliance
- Final Rule on Changes to Registration Requirements for Trusts
- The dates in your diary
Dashboards: draft rules for FCA-regulated pension providers
The Financial Conduct Authority (FCA) has published a consultation on proposed rules for personal pension providers and stakeholders regarding the provision of information to pension dashboards. The consultation ends on April 8, 2022. It is taking place alongside a government consultation on draft regulation of occupational pension schemes launched earlier this month. The FCA aims to publish its policy statement and finalized handbook rules in the fall of 2022, alongside or shortly after parliament approves the government regulations.
High Court: EU pensions protected in bankruptcy
The High Court has ruled that, contrary to UK law, rights in pension schemes recognized for tax purposes in an EU member state are protected in UK bankruptcy proceedings: Wilson and another against McNamara and others. However, the court left this issue open to future challenges.
The case concerned an Irish citizen who went bankrupt in England, with rights in an Irish pension scheme. Under UK law, rights in pension schemes registered under the UK Finance Act 2004 are excluded from assets recoverable in bankruptcy. The case went to the European Court of Justice (ECJ) to decide whether the UK legislation was contrary to EU law (it was brought before the end of the Brexit transition period). The CJEU ruled in November 2021 that the exemption placed migrant workers at a particular disadvantage because, generally speaking, most migrant workers would have their pension rights in schemes established outside the UK which would generally not be approved. for UK tax purposes. Therefore, he concluded that UK law is indirectly discriminatory, unless it can be found to be objectively justified and proportionate. He did not rule on whether there was objective justification, but said that was a matter for the UK court.
The most recent judgment dealt with whether the UK court should consider the issue of justification. Lord Justice Nugee dismissed the request to consider this point as it was not one that had been raised previously and it was not procedurally appropriate to raise it at this stage. Therefore, it decided that the bankruptcy exemption provided by UK law should be interpreted as including assets of a scheme established in another Member State which was recognized for tax purposes. He, however, left the door open for a future case to examine whether there was an objective justification for the UK legislation being limited to UK-registered schemes.
Tribunal: no reasonable excuse for EI non-compliance
The First Tier Court considered three cases in which employers claimed they had not received reminders from the Regulator of Pensions (TPR) about the automatic enrollment requirements and therefore should not have done so. subject to fixed fines for non-compliance with these requirements. In each case, the Tribunal found that there was no reasonable excuse for non-compliance.
The Tribunal noted that TPR did not have to prove that the documents were delivered; there is a legislative presumption that if a document has been sent to an appropriate address, it has been received. Nor did the employer have to prove that the documents had not been received; if there is strong evidence to the contrary, the presumption can be rebutted, but in these cases no supporting evidence has been provided. In all cases, employers have an obligation to comply with the self-registration requirements, and even if they did not receive the reminders, they were not relieved of this obligation.
Regulations amending the requirements for registering trusts with HMRC’s Trust Registration Department have now been finalized and will come into force on 9 March 2022. The regulations amend the deadlines for registering relevant taxable trusts and exclude certain express trusts the obligation to register (registered pension plans are already excluded from the obligation to register). The exclusions now cover, for example, both a trust holding a life insurance policy and a trust for benefits payable under that policy, as well as a bank account trust holding funds for a minor.
The curriculum for our forthcoming Pensions Academy Online (an update on issues relating to pension schemes and the people who run them) is now available. Please see the list below.
March 7 Money Laundering and Proceeds of Crime – What Trustees Need to Know
March 8 Pension Schemes Act 2021: new offenses and reportable events – where do we stand?
March 9 Management of an investigation
March 10 legal update – including transfers, scorecards, unique code, superfunds and more
March 11 Governance and reporting on climate change – theory and practice