We hosted our national pensions briefings by webinar where we looked at the provisions of the Pension Schemes Bill 2019 - 20 in detail, discussing its progress to date through Parliament, and the more controversial elements that have garnered press coverage.
Shoosmiths national pensions briefing took place on 5 May 2020, hosted by Lynette Lewis & Julian Richards.
We highlight the key areas of concern for trustees, employers and third parties (such as debt and equity providers), including that legitimate corporate activity could in some circumstances be a criminal offence under the Bill.
The progress of the, already delayed, Pension Schemes Bill has been slowed further by priority given to COVID-19 related legislation and is not expected to be completed before 2021. The delay, coupled with the delay in the new defined benefit funding code, will present trustees with significant increase in responsibilities next year.
There is some disappointment that the provision of collective money purchase benefits will be restricted to single, or connected, employers rather than being more widely available through Mastertrust style schemes or decumulation vehicles. This could be seen as an opportunity missed and one that may need to be revisited.
The Bill has been criticised in some quarters for relying on provisions of secondary legislation and guidance from the Pensions Regulator, particularly in relation to CDC schemes, transfer rules and pensions dashboards, which has not yet been drafted and may be subject to less intense scrutiny.
Provisions relating to strengthening of the Pensions Regulator’s powers are broadly welcome, but there is significant concern over the potentially very broad application of new criminal offences relating to avoidance of employer debt and conduct risking accrued scheme benefits, especially as regards unintended consequences for trustees and advisers.