Pension news
Pension news
New round of pension compliance checks IN MAY, The Pensions Regulator (‘the Regulator’) announced that in the weeks over the summer a new wave of compliance checks are being targeted at employers across the UK considered to be non-compliant with their automatic enrolment duties. The Regulator is using data to pinpoint specific employers suspected of breaking the law, including those that fail to put staff into a pension scheme or that make nil or incorrect pension contributions. It is mandatory for employers to take part in the inspections, as obstruction of an inspector and failing to provide information when required to do so are criminal offences. Non-compliance could also result in fines or court action. The Regulator’s director of automatic enrolment, Darren Ryder, said data and intelligence streams enable it to detect potential non-compliance and take swift action against individual employers which “allows us to target our resources in a very focused way as part of our role to protect pension savers. “We know the vast majority of employers are doing the right thing for their staff, however there are a small minority who persistently ignore their responsibilities. They can expect a knock at the door from us and enforcement action.” The Regulator will also be directly contacting other employers suspected of non-compliance by phone to validate the information held related to them meeting their duties, to ensure they are complying fully. Impact of the right default fund RECENT RESEARCH by the Tax Incentivised Savings Association (TISA) suggests pension fund performance is a significant factor when it comes to saving for retirement. According to TISA, a 1% increase in investment fund performance is equivalent to a 3% increase in contributions over a fifty-year period. However, most employees are invested in ‘default funds’ which offer hugely varying levels of returns, ranging from 3.4% to 11.9%. To illustrate the impact of a performance uplift in monetary terms, if someone on a £30,000 salary invested in a pension fund with an annual growth rate of 3.4%, their fund would be valued at £153,600 after fifty years. Comparatively, if someone on the same salary invested in a pension scheme with an 11.9% annual growth rate, their fund would be valued at £2,271,200 over the same period. Renny Biggins, retirement policy manager at TISA, said: “We would like to see providers, employers and financial advisers adopt a more holistic approach when selecting a default fund.”
State pension errors IN RESPONSE to a letter from Sir Steve Webb, director of policy at Royal London and This is Money, Guy Opperman MP, the pensions minister, recognised that “there is a significant problem” with the state pension forecasts produced by the Check your State Pension online service provided by the Department for Work and Pensions (DWP). It is estimated that since 2016, when the online service went live, 360,000 forecasts – 3% of the total – have misstated the pension the worker would receive. Opperman indicated that those “with a particularly complex work history, where they have transferred between defined benefits schemes, may find that there is a difference between their online forecast and any paper forecast they receive…”. Asserting that “…HMRC records can never be perfect – there will always be a residual level of error in the system”, the minister claimed that “HMRC have increased the accuracy of National Insurance records and reduced the number of cases requiring corrective action in advance of state pension age from 10 per cent of claims in 2013–14 to 3 per cent in 2018–19” The DWP say “that a small proportion of online state pension forecasts may have been affected by errors”, and that “officials are working urgently with HMRC to make sure this problem is resolved as quickly as possible.” Updated pension scams code THE PENSION Scams Industry Group – the voluntary body set up to support trustees, providers and administrators in combating pension scams – has updated its Combating Pension Scams – A Code of Good Practice (http://bit. ly/2WV0z4D). Key highlights of the updated code, which reflects developments and changes that have affected the industry over the last year, include: ● ● introduction of the cold calling ban ● ● inclusion of the Money and Pensions Service ● ● the rise of claims management firms and impact on the industry ● ● revised action fraud reporting guidance. Nicola Parish, The Pensions Regulator’s executive director for frontline regulation, said: “The updated code will allow providers to more easily understand how they can help to prevent savers losing their funds to criminals.”
Cyber security guidance THE PENSIONS Administration Standards Association (PASA) has published guidance for pension schemes to provide practical support for trustees in formulating a robust and effective review of how they safeguard their scheme from cyber security issues. The guidance (http://bit.ly/2Rm42Db) covers five main sections: risk assessment, governance, risk management, controls and incident management. Chris Connolly, chair of PASA’s eAdmin Working Group said: “Our guidance has been designed as a practical means to help identify where all risks and responsibilities lie, enabling schemes to put together a robust and effective plan of action to be taken should the worst unfortunately happen.”
32
| Professional in Payroll, Pensions and Reward |
Issue 52 | July/August 2019
Made with FlippingBook - Online magazine maker