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Pensions Insights – January 2024

18 January 2024
In our monthly e-alert, Pensions Insights, we give you our take on the latest highlights in the world of pensions law and policy.

Case Law

British Broadcasting Corporation v BBC Pension Trust Ltd & Anor [2023] EWHC 1965 (Ch) – appeal date confirmed

Further to our report on the case of British Broadcasting Corporation v BBC Pension Trust Ltd & Anor [2023] EWHC 1965 (Ch) in our August edition of Pensions Insights, permission to appeal the decision has been granted and we understand the hearing date for this case will be 25 June 2024.

New Law

The Pensions Dashboards (Prohibition of Indemnification) Act 2023 (Commencement) Regulations 2023

These Regulations brought into force Section 1(1) of the Pensions Dashboards (Prohibition of Indemnification) Act 2023 (no indemnification for penalties under pensions dashboards regulations) on 1 January 2024.

This amendment makes it an offence for a Trustee or Manager of an occupational or personal pension scheme to be reimbursed from scheme funds for a civil penalty imposed by regulations such as the Pensions Dashboards Regulations 2022. The civil penalty regime in Section 10 of the Pensions Act 1995 also applies where Trustees or Managers do not take all reasonable steps to comply with the provisions prohibiting indemnification in respect of civil penalties and reimbursement is paid out of scheme funds.


TPO response to the CMG ‘competent court’ judgment in overpayment recovery cases

The Pensions Ombudsman (TPO) has expressed disappointment with the recent Court of Appeal ruling that it was not a ‘competent court’ for the purposes of concluding overpayment disputes where recoupment is sought. See our November Insights for background.

TPO has created a factsheet to provide guidance on how overpayment disputes should be managed – noting it is hoped that the additional step arising from the Court of Appeal’s ruling (that in England and Wales an order by the County Court is needed as a final step in overpayment cases, before recoupment can begin) should not prove unduly burdensome, as the role of the County Court is only to enforce the Ombudsman’s Determination, and not reconsider the merits of the complaint. The factsheet notes that a different court procedure may apply in Scotland and Northern Ireland.

TPO has been working with stakeholders from across the sector to review the management of overpayment disputes, in order to minimise the additional time and cost burden that has been added to the process.

In response to the ruling, DWP is supporting legislative changes to formally empower TPO to bring an outstanding overpayment dispute to an end without the need for a County Court order.

TPR publishes General Code

TPR has published the new General Code which is expected to come into force on 27 March.

The General Code of Practice is the name given to TPR’s programme to merge 10 of its existing codes into a single new code, the 10 codes rolled into the General Code are:

  • Reporting breaches of the law
  • Early leavers
  • Late payment of contributions (occupational pension schemes)
  • Late payment of contributions (personal pension schemes)
  • Trustee knowledge and understanding
  • Member nominated Trustees/member-nominated Directors putting arrangements in place
  • Internal controls
  • Dispute resolution reasonable periods
  • DC code
  • Public service code

This sets out in detail what TPR expects of a scheme that is required to maintain an effective system of governance and brings together many key aspects of running a scheme. The detail of what constitutes an effective system of governance will be dependent on the size and complexity of the scheme.

TPR expects scheme governing bodies to be able to demonstrate that they have appropriate procedures and policies in place.

The Code introduces the Own Risk Assessment (ORA), which is a periodic review of the effectiveness of the features of the system of governance intended to help the governing body focus on key areas in need of improvement in the governance and operation of their scheme.

PPF Levy rules for 2024/25 published

The Pension Protection Fund (PPF) has announced its final levy rules for 2024/25, and confirmed a 50 per cent reduction in its target levy collection to £100m next year, down from £200m in 2023/24.

Next year’s levy will be the lowest the PPF has charged since it came into operation, and almost all PPF-eligible defined benefit schemes are expected to see a further reduction in their levy next year.

The PPF’s ability to reduce the levy further is limited by legislation.  

Points of note from the announcement include that:

  • The target levy collection for 2024/25 will be £100m, down from £200m in 2023/24.
  • 99 per cent of defined benefit schemes are expected to pay less levy in respect of 2024/25.
  • Levy methodology remains broadly unchanged.
  • Stakeholders have called for legislative change to enable further reductions in levy in future.
  • DWP to consider points raised and are expected to legislate when parliamentary time allows.

If you have any queries about any of the issues covered, or you require advice on a pensions related matter, please do not hesitate to contact your usual contact.

Further Reading