General Election: With the Labour Party winning at the General Election, attention will turn to their manifesto pledges. We know that they are committed to maintaining the ‘triple-lock’ for state pensions. They have also said they will give increased power to the Office for Budget Responsibility (OBR) to publish forecasts and analysis alongside any tax and spending changes, which is intended to prevent a situation like the former Government’s ‘mini-budget’ which caused market chaos, before being largely reversed.
Other manifesto pledges included steps to improve member outcomes and increase the level of investments in the UK. The government also intends to encourage further consolidation to deliver better returns for pension savers. Further details on plans are likely to follow the King’s Speech during the State opening of Parliament on 17th July. Liz Kendall, the MP for Leicester West, has been appointed as Secretary of State for Work and Pensions. Emma Reynolds, the MP for Wycombe, has been appointed as Pensions Minister
Virgin Media Case – Appeal: Last week, the Court of Appeal heard the appeal against the 2023 High Court judgment in the Virgin Media case. The judgment ruled that actuarial confirmation, required for amendments to scheme rules related to certain contracted-out rights, must cover both past and future service rights. The appeal argues that only past service rights need actuarial confirmation.
The Court of Appeal’s decision, expected by Autumn, will be keenly awaited. If it supports the past service-only view, some concerns will fall away. Otherwise, calls for intervention by the Department for Work and Pensions are likely.
Buy-out providers – New entrant: Toronto based Brookfield is entering the UK bulk annuity market after applying to establish an insurance company, according to the Financial Times. The Toronto-based firm has filed paperwork with the Bank of England’s Prudential Regulation Authority. Brookfield had considered acquiring an established provider and previously contemplated a bid for Pension Insurance Corporation (PIC) but was deterred by the valuation. This means there will be 11 companies offering bulk annuities.
Pensions Ombudsman – Plans to reduce waiting times: Robert Loughlin, the new Chief Operating Officer at the Pensions Ombudsman, has announced plans to address historical caseloads and reduce waiting times. Key changes include tightening complaint investigation conditions, extending expedited determinations, and exploring new acceptance thresholds. The full programme aims for significant improvements over the next three years, with notable progress expected within 12-18 months. Complainants can currently approach the Ombudsman’s ‘early resolution’ team before using a scheme’s complaint procedures. The proposed changes mean that those making a complaint will need to have exhausted their options under a scheme’s ‘internal disputes resolution procedure’ first.
King’s Speech – New Pensions Bill: At the State opening of Parliament, the King announced that the Government will be introducing a Pensions Bill. Details of some of the proposals accompanying the speech indicate that they are an extension of the previous government’s plans, rather than anything radically different. The Bill will include measures to automatically consolidate small DC pots so individuals don’t lose track of their pensions. The value for money framework for trust based DC schemes will be strengthened, and consolidation encouraged. Measures will be introduced to encourage commercial superfunds to consolidate the DB market. As we have noted many times before, we believe that the reasoning behind consolidation is misjudged and that there are many benefits that small scheme specialists can offer sponsors and members, which the bigger players can’t. When proposals are issued, Atkin will respond to the consultations to make these points.
