MPs ‘likely’ to examine pension scheme governance in future sessions
Image: Stevebidmead/Pixabay
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
The Work and Pensions Committee is “likely” to look at pension scheme governance “in future evidence sessions”, its chair has said. Elsewhere, as surplus release is set to become law, the committee chair has asked the pensions minister if there are plans for an independent arbiter between sponsors and trustees, as well as legislation to change the tax treatment of one-off pension payments.
In her email to the pensions minister, Debbie Abrahams said the committee welcomes the Pensions Regulator’s work to raise governance standards, “considering how to prevent unintended consequences from market developments, including the rise in sole trusteeships” among others.
She added: “We are likely to return to these issues in future evidence sessions.”
The Department for Work and Pensions is due to publish a consultation on pension scheme governance this year. The committee has not announced any inquiry or sessions in relation to this so far.
DB pensioners continue campaign for discretionary increases
On 22 October, MPs held a non-inquiry session on discretionary payments and member representation in defined benefit schemes. Pensioner groups have long lobbied for discretionary increases on accrual before 1997, which are rarely provided, so far without success, but the latest pension schemes bill is seen as an opportunity by some to change this.
Abrahams noted that the government has previously said trustees could negotiate benefit increases in exchange for agreeing to surplus release under the pension schemes bill.
The MP for Oldham East and Saddleworth has now asked the minister “what consideration you have given to the case for an independent arbiter where trustees and employer do not agree on the distribution of surplus”, and if not, whether there are alternative plans “to monitor how surplus is distributed and act if trustee recommendations are not implemented”.
She also pointed out that many trustee boards might not want to release surplus before wind-up.
The committee is also putting pressure on the government around the tax treatment of one-off pension payments where surplus is shared with members. Abrahams has asked the pensions minister to explain what discussions he has had with HMRC “regarding any changes to pension tax legislation needed to enable one-off payments to scheme members”.
