UK: The Pensions Brief - February 2019

Last Updated: 19 March 2019
Article by Edward Jewitt and Katherine Carter


Life assurance arrangements and QROPS – employer premiums/contributions

Legislation will come into force on 6 April 2019 that changes the tax treatment of premiums paid by employers to standalone life assurance arrangements and employer contributions to qualifying recognised overseas pension schemes (QROPS) so that premiums/contributions will be tax-exempt if the beneficiary is an individual or a registered charity.


Employers who offer a life assurance arrangement and/or pay contributions to QROPS should consider whether the tax treatment of the premiums/contributions will be affected.

Investment consultancy and fiduciary management – CMA remedies order

The Competition and Markets Authority (CMA) is consulting on a draft order implementing the remedies that it has decided to impose following its review of the investment consultancy and fiduciary management markets. Under the draft order, trustees would be:

  • prohibited from receiving fiduciary management services in certain circumstances unless they have carried out a competitive tender process;
  • prohibited from receiving investment consultancy services unless they have set strategic objectives for the investment consultant; and
  • required to submit annual statements with an accompanying certificate to the CMA on their compliance with these requirements.

The requirements will come into force six months after the order is made. The draft order envisages that the requirements will fall away once equivalent requirements are brought into force by the Pensions Regulator. The CMA has also published an accompanying draft explanatory note. The consultation closes on 13 March 2019.


Trustees should keep the progress of implementation of the CMA's remedies under review.

Brexit – changes to pensions legislation

The regulations making changes to pensions legislation to reflect Brexit have now been made. The main changes made are to:

  • adjust references to the UK as an EU/EEA state where a distinction is being drawn between EU/EEA states and other overseas countries; and
  • repeal the cross-border pensions regime.

The regulations will come into force on the date of Brexit.


No action required.


2019/20 Pension Protection Fund levy – deadlines approaching

The deadlines for the 2019/20 PPF levy are as follows:

  • 31 March 2019 (midnight) – online submission of scheme returns, contingent asset certificates, asset-backed contribution certificates, mortgage exclusion certificates and supporting evidence, accounting standard change certificates, and special category employer certificates.
  • 1 April 2019 (5pm) – submission of hard copy contingent asset documents.
  • 30 April 2019 (5pm) – submission of deficit reduction certificates and exempt transfer applications.
  • 28 June 2019 (5pm) – submission of full block transfer certificates.

Schemes with a Type A (group company guarantee) or Type B (charge over shares, UK real estate or securities) contingent asset may need to re-execute that contingent asset in order to certify it for the 2019/20 levy. For more information, please see our legal update.


If they have not done so already, trustees and employers with existing Type A and Type B contingent assets should confirm whether they are subject to the re-execution requirement.


Trustees and employers should ensure that any required information and documents are submitted by the relevant deadline.

Protecting DB pensions – new Pensions Regulator powers

The government has responded to its consultation on proposed new Pensions Regulator powers. The response confirms that:

  • A range of new Regulator powers will be introduced, including creation of a new offence of "wilful or reckless behaviour in relation to a pension scheme" which will be punishable by up to seven years' imprisonment, unlimited fines, and/or a civil penalty of up to £1 million.
  • Changes will be made to the list of employer-related notifiable events.
  • Parties planning particular types of corporate transactions affecting a scheme employer will be required to send a "declaration of intent" to the trustees and the Regulator.
  • Changes will be made to the anti-avoidance regime, including replacing financial support directions with financial support notices under which the financial support to be provided must be cash and/or joint and several liability of the targets for the employer's liabilities to the scheme.
  • A new sanction of a civil penalty of up to £1 million will be introduced for breaches of certain statutory duties, including failure to comply with a contribution notice, failure to comply with a financial support notice, and failure to comply with the notifiable events regime.

The government plans to consult on regulations making some of the changes, and will lay legislation "when Parliamentary time allows". For more information, please see our legal update.


Trustees and employers should keep the progress of implementation of the government's proposals under review.

Derivatives – EMIR clearing exemption

The UK government has published guidance on the exemption for pension scheme arrangements (PSAs) from the clearing obligation under the European Markets Infrastructure Regulation (EMIR) post-Brexit. This confirms that the government intends to introduce legislative amendments to incorporate the temporary exemption for PSAs that will be introduced under a forthcoming EU regulation so that the exemption will apply to both UK and EEA PSAs post-Brexit.


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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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