Welcome to your weekly update from the Allen & Overy Pensions team, covering all the latest legal and regulatory developments in the world of workplace pensions.
This week we cover topics including: Dashboards: draft rules for FCA-regulated pension providers; High Court: EU pensions protected on bankruptcy; Tribunal: no reasonable excuse for AE non-compliance; Final regulations on changes to trust registration requirements.
The Financial Conduct Authority (FCA) has published a consultation on proposed rules for personal and stakeholder pension providers on supplying information to pensions dashboards. The consultation closes on 8 April 2022. This runs alongside a government consultation on draft regulations for occupational pension schemes launched earlier this month. The FCA is aiming to publish its Policy Statement and finalised Handbook rules in autumn 2022, alongside or shortly after parliament approves the governments regulations.
Read the consultation.
The High Court has ruled that, contrary to UK legislation, rights in pension schemes recognised for tax purposes in an EU member state are protected in UK bankruptcy proceedings: Wilson and another v McNamara and others. However, the court has left this open to future challenge.
The case involved an Irish citizen made bankrupt in England, with rights in an Irish pension scheme. Under UK legislation, rights in pension schemes registered under the UK Finance Act 2004 are excluded from the assets that can be recovered on bankruptcy. The case was referred 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 ECJ held, in November 2021, that the exemption placed migrant workers at a particular disadvantage because, broadly, most migrant workers would have their pension rights in schemes established outside the UK which would not in general be approved for tax purposes in the UK. Therefore, it found that the UK law is indirectly discriminatory, unless it could be found to be objectively justified and proportionate. It did not rule on whether there was objective justification, but said this was a matter for the UK court.
The most recent judgment dealt with whether the UK court should consider the question of justification. Lord Justice Nugee rejected the request to consider that point, as it was not one that had been raised previously, and it was not procedurally appropriate to raise it at this stage. Therefore, he decided that the bankruptcy exemption in the UK legislation should be read as including assets in a scheme established in another member state that was recognised for tax purposes. He did however leave the door open for a future case to consider whether there was objective justification for the UK legislation being limited to schemes registered in the UK.
Read the decision.
The First-tier Tribunal has considered three cases where employers claimed that they had not received reminders from The Pensions Regulator (TPR) in relation to auto-enrolment requirements, and therefore should not have been subject to fixed penalty notices for not meeting those 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 documents were delivered; there is a legislative presumption that if a document has been sent to a proper address, it has been received. The employer equally did not have to prove that the documents were not received; if there is strong evidence to the contrary, the presumption can be displaced, but in these cases no evidence had been provided to support this. In any case, employers are under an obligation to comply with the auto-enrolment requirements, and even if they did not receive the reminders, they were not relieved of that duty.
Read the cases: Skewer House Taunton Ltd v TPR, Condor Estates Ltd v TPR and Total Industrial Machines Ltd v TPR
Regulations making changes to the requirements for trusts to be registered with HMRCs Trust Registration Service have now been finalised and will come into force on 9 March 2022. The regulations make changes to the time limits for registration of taxable relevant trusts and exclude certain express trusts from the requirement to register (registered pension schemes are already excluded from needing to register). The exclusions now cover, for example, both a trust holding a life policy and a trust of the benefits payable under that policy, as well as the trust of a bank account holding funds for a minor.
Read the regulations.
The programme for our next Pensions Academy Online (an update on issues for pension schemes and the people who run them) is now available. Please see the list below.
Date Topic
7 March Money laundering and proceeds of crime what trustees need to know
8 March Pension Schemes Act 2021: new offences and notifiable events where are we now?
9 March Handling an investigation
10 March Legal update including transfers, dashboards, single code, superfunds and more
11 March Climate change governance and reporting theory and practice
Click here for more information or to register.
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Pensions: what's new this week February 2022 # 3 | Allen & Overy LLP - JDSupra - JD Supra
- Boy Scouts' bankruptcy judge approves nearly $250 million in fees - Reuters - October 22nd, 2023 [October 22nd, 2023]
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- In Kolkata, India's new bankruptcy law is put to the test - Financial Times - April 30th, 2023 [April 30th, 2023]
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- Bed Bath & Beyond shares drop after it files for bankruptcy protection - Detroit Free Press - April 30th, 2023 [April 30th, 2023]
- Bankruptcy Battle Breaks Out Over Greenwich Village Dev Site - The Real Deal - April 30th, 2023 [April 30th, 2023]
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- DCG Creditor Pact Revealed With Plan to Sell Genesis Trading Unit as Part of Bankruptcy - CoinDesk - February 7th, 2023 [February 7th, 2023]
- Staring Down Bankruptcy, Bed Bath & Beyond Says It Will Sell Stock - The New York Times - February 7th, 2023 [February 7th, 2023]
- Pet store with several Mass. locations files for bankruptcy, will cease operations at end of month - Boston 25 News - February 7th, 2023 [February 7th, 2023]
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- J&J Talc Bankruptcy 'Bad Faith' Claims Go Before Third Circuit - Bloomberg Law - September 20th, 2022 [September 20th, 2022]
- New amendments to bankruptcy code can maximise recovery of stressed assets - DNA India - September 20th, 2022 [September 20th, 2022]
- Judge reports threats, harassment over J&J talc bankruptcy - Reuters - September 17th, 2022 [September 17th, 2022]