Helm News: Pension Protection Fund (PPF) Levies
Employers struggling with the ever-increasing costs of final salary pension schemes will be glad to hear that the total amount of Pension Protection Fund levies for 2013/14 is expected to be held at a similar level to that for 2012/13. The PPF has, however, warned that future levy increases are inevitable if current economic conditions continue. It expects that increases of around 10% might be needed for 2014/15.
The PPF is the lifeboat for pension members of failed sponsoring employers and the next full review of the formula and parameters of the levies, which support it, is due before 2015/16.
The requirement for employers to make available Stakeholder pension schemes to all employees has been removed from 1 October 2012 (when, for the largest employers in the UK, it is replaced by the automatic enrolment legislation).
Arrangements for employees already contributing to existing stakeholder schemes must continue, but need no longer be offered to new members. Otherwise, the requirements are removed for all employers now even though the auto-enrolment legislation may not apply to them for months or even years. Smaller employers will therefore actually enjoy reduced legislative requirements from now until their auto-enrolment ‘staging date’!
Trustees of pension schemes should have made progress towards meeting the Pensions Regulator’s requirements for improving the quality of their member data. Trustees’ recordkeeping should by now me more ship shape as targets need to be met by December 2012.
A record-keeping checklist can be found on the Pensions Regulator’s website at: http://www.thepensionsregulator.gov.uk
Trustees and employers are reminded of the importance of fulfilling their Data Protection duties.
The Information Commissioner has fined a local authority in Scotland for not taking adequate care when arranging the transportation and disposal of old paper records. Pension scheme records were sent to a public recycling centre by a contractor employed by the council rather than being securely destroyed (Information Commissioner’s Office, News Release: 11 September 2012). Although the work was outsourced, the council was held responsible for the failings as it had a duty to oversee and ensure the secure handling and disposal of data and obtain sufficient guarantees from any contractor.
Monitoring pension contributions
New draft codes of practice published by the Pensions Regulator intend to place a further burden on pension scheme trustees in the form of a duty to monitor employers’ compliance with their auto-enrolment duties. Extended contribution monitoring requirements are proposed together with reporting and whistle-blowing responsibilities.