Pensions: what's new this week - March 17, 2024

Minister's speech on pensions policies

The Pensions Minister, Torsten Bell, has given a speech discussing the government’s pensions agenda. The speech echoed previous messaging on several issues: the importance of value for money in the DC sector; the preference for fewer, larger pension schemes; and the government’s desire to encourage schemes to invest in “productive assets” to boost the UK economy. The Minister referred to expected changes to the rules allowing access to DB surpluses, stating that trustees are “the best placed to determine, in consultation with employers, the appropriate use of any surplus in their scheme.” He also noted that the government is considering proposals to allow the Pension Protection Fund greater flexibility to reduce the levy it collects from pension schemes.

The speech included timing updates on some upcoming developments: phase 1 of the government’s Investment Review will be finalised in the coming weeks; the aim is to introduce the Pension Schemes Bill before the summer recess (though “not everything that could be legislated for will be legislated for in the forthcoming Bill”); and a response to the Options for DB schemes consultation, discussing access to DB surpluses, is expected this Spring.

Read the speech.

TPR’s latest regulatory intervention report

The Pensions Regulator’s (TPR) latest regulatory intervention report provides insight into its involvement with the MGN Pension Scheme and its sponsor, in circumstances where the parties had failed to agree the scheme’s 2019 triennial valuation. The matter was originally dealt with by TPR’s supervision team, but was handed over to TPR’s enforcement team in mid-2022. The failure to agree persisted beyond the effective date of the 2022 valuation, meaning that agreement had to be reached in relation to both valuations. TPR highlights that it would have been prepared to take formal enforcement action had the parties not eventually resolved their differences, and gave the parties clear directions to this effect.

The agreement reached includes additional deficit recovery contributions that should mean that the scheme is fully funded on its technical provisions basis by January 2028, and an improved dividend sharing agreement, under which amounts above a specified percentage increase in dividend distributions will result in a sum matching the excess being paid to the scheme.

Read the MGN Pension Scheme regulatory intervention report.

Annual GMP increase order

The Guaranteed Minimum Pensions Increase Order 2025 will come into force on 6 April 2025, setting the increase rate for GMPs in payment attributable to earnings factors for the tax years 1988/89 to 1996/97 at 1.7%.

Read the Order.