Case Law
Virgin Media Limited v NTL Pension Trustees II Limited – appeal date confirmed
Further to our report on the case of Virgin Media Limited v NTL Pension Trustees II Limited, Ross Russell Limited, John Jardine in the June 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 Act 2004 (Amendment) (Pension Protection Fund Compensation) Regulations 2023
See our September Insights for background.
These Regulations have been approved and will come into force immediately before the end of 2023.
The Pensions Act 2004 and the Equality Act 2010 (Amendment) (Equal Treatment by occupational pension schemes) Regulations 2023
See our September Insights for background. These Regulations have been approved and will come into force immediately before the end of 2023.
News
TPR updates cyber security guidance
TPR is calling on trustees to report significant cyber-related incidents as part of updated guidance to tackle the ongoing threat posed by cyber criminals.
TPR warns a significant cyber incident is likely to result in:
- a significant loss of member data;
- major disruption to member services; and/or
- a negative impact on a number of other pension schemes or pension service providers.
Schemes, their advisers and providers are being asked to report significant cyber incidents to TPR on a voluntary basis, in an open and cooperative way, as soon as reasonably practicable so TPR can build a better picture of the cyber risk facing the industry and its members.
FCA statement on value for money
The FCA has confirmed that in spring 2024 it will consult on detailed rules for a new value for money (VFM) Framework for DC workplace pensions - noting that the VFM framework has been deliberately designed to shift the focus from cost to longer-term value and aims to ensure transparency and delivery of VFM in the market.
The FCA is responsible for the regulation of contract-based defined contribution schemes and is working alongside the DWP and TPR to ensure the new framework is consistent across all DC schemes.
Schemes will be required to test their propositions against others in the market to ensure they deliver long term value for savers, including those with the scale to invest in diversified investment strategies. Our requirements around comparisons will consider the latest evidence on the different potential benefits of scale.
PPF guidance for trustees on their approach on PPF consideration in distressed employer situations
In response to cases which have considered the extent to which trustees of pensions schemes relating to a distressed employer can take into account the availability of PPF compensation, the PPF has published new Guidance Note 13. This includes guidance on the tests that it believes trustees should apply in distressed employer situations, and the matters to be considered in applying those tests.
The guidance notes that where a scheme is (or could become) in deficit on a PPF basis any consideration of whether to wind up the employer (or wind up the scheme), must not take account of the availability of PPF compensation, and must instead proceed on the basis that any increase in the PPF Deficit caused by delaying the winding up will be borne by the members who are adversely affected by PPF Deficit drift, and who will as a result suffer a reduction to the benefits that would otherwise be payable to them on a winding up of the scheme.
It also confirms the PPF’s view that to address the tests trustees need to inform themselves of, and take into account:
- Funding levels and drift;
- Volatility, hedging and the prospects of future investment returns;
- The nature and extent of any employer’s breaches; and
- Recoveries on winding up.
