Latest developments in the ever-changing world of occupational pension schemes.





Lifetime ISA from 6 April 2017

Savings (Government Contributions) Bill 2016 published on 6 September 2016 - introduces the new Lifetime ISA from 6 April 2017. Save up to £4,000 per annum into a "Lifetime ISA" until your 50th birthday and then access it (along with a Government-funded "bonus") tax-free, either as a deposit for your first house or once you've hit age 60.

Reduction in Lifetime Allowance ("LTA")

Finance Act 2016 enacted 15 September 2016 - change in the LTA to £1 million is retrospective to 6 April 2016 with right to elect for protection from the change. 

Single State Pension from 6 April 2016

Problematic areas remain including:

  • whether scheme rules relating to GMP revaluation need amending and, if so, whether under the scheme's amendment power or by trustees using their new statutory modification power available from 6 April 2016 to 5 April 2017; and
  • a legislative flaw means group transfers without members' consent cannot be made to a new scheme in relation to members' contracted-out rights. Government may correct this next year.

Secondary annuity market

Government is going ahead with the secondary annuity market from April 2017. The relevant tax legislation will be in Finance Bill 2017.

Accessing (or transferring) DC trust based benefits

Disclosure Regulations amended: DC trust based schemes must provide generic risk warnings as a second line of defence, on top of the existing statements/warnings already required.

GMPs - sex equalisation

Questionable whether Government will proceed following the BREXIT Vote. Lloyds Bank's Union announced in August 2016 it was lodging an Employment Tribunal claim for GMP sex equalisation.

Trustee insurance contracts

Insurance Act 2015 came into force on 12 August 2016; trustees effecting or renewing trustee liability policies and buy-in/buy-out contracts should obtain legal advice on the Act.




The Courts continue to be busy with pensions cases with many important Court of Appeal decisions due this Autumn.



VAT – recipient of services

Airtours v HMRC

May 2016

In 'Airtours' PWC provided its services (financial report on Airtours) under a tripartite agreement between PWC, Airtours and Airtours' bankers. Airtours sought to reclaim input tax on PWC's invoices paid by Airtours. HMRC refused the claim on the basis that PWC's services were supplied to Airtours' bankers, and not to Airtours.  The Supreme Court has upheld HMRC's decision. HMRC update on 5 September 2016 extends transitional period to 31 December 2017.

Actuary's certificate on group transfer of members

Pollock v Reed

May 2016

On a group transfer of members without their consent Regulations require the actuary to give a certificate. The High Court decided that the "broadly no less favourable" condition in the Regulations does not allow the actuary to take into account the security of benefits in the receiving scheme.

Bankruptcy and elections for pension

Horton v Henry

October 2016

Whether trustees in bankruptcy can oblige bankrupt individuals to crystallise their DC pot and start their pension, so trustees in bankruptcy can obtain an income payments order in respect of the pension. The Court of Appeal upheld the High Court's decision that the pension has to be in payment before the Court can make an income payments order.

Sex discrimination

Walker v Innospec

November 2016

In 2015 the Court of Appeal dismissed Mr Walker's claim to a full civil partner's pension. The Supreme Court hearing is due in November 2016 but timing depends on the European Court of Justice judgment in 'Parris' concerning same sex partner survivor benefits.

Defective deeds

Briggs v Gleeds

Appeal October 2016


In July 2015 the High Court held that a series of amending deeds were legally ineffective as they had not been properly executed. This and other matters, including the meaning of the scheme's alteration powers, are being appealed to the Court of Appeal.


Buckinghamshire v Barnardo's

Appeal October 2016

The High Court decided in July 2015 that RPI had not been replaced by CPI and therefore under the wording of the scheme rules the trustee could not switch to CPI. This finding is being appealed. The members are cross-appealing on section 67 Pensions Act 1995, arguing that the trustees switching to another index would breach the section 67 protection for subsisting rights. See our November 2015 Bulletin for the High Court decision. The Court of Appeal hearing was due in early October 2016.


British Airways v Spencer

Appeal October 2016

British Airways are seeking to overturn the decision of the BA pension scheme trustees to give themselves power to award discretionary pension increases, following the Government's switch from RPI to CPI for statutory purposes. High Court hearing scheduled for 26 October 2016.

Employer's duty of good faith

Bradbury v BBC

Appeal  2017

Court of Appeal hearing due in February/March 2017 – a long time to wait! The High Court previously decided in May 2015 that the BBC was not in breach of its employer's duty of good faith by imposing a cap on pensionable salary.

Employer duties

IBM v Dalgleish

Appeal 2017

Court of Appeal hearing not now anticipated until May 2017 – the High Court decision in 2014/15 that IBM were in breach of the duty of good faith and the remedies awarded are both being appealed.



Besides giving evidence to the BHS Parliamentary Select Committee (please see article in this Bulletin) TPR has been active in numerous other areas.



DC Governance

(1) New Code of Practice re DC trust based Schemes – the new Code was laid before Parliament on 9 May 2016 and took effect in early July. Six TPR guidance notes to the Code are expected to be issued. Codes of Practice do not have the force of law but, if relevant to any questions arising in legal proceedings, must be taken into account by the Court or tribunal.

(2) TPR has now issued three well-publicised fines for failure to produce an annual governance statement - the trustee of the Abbey Manor Group Pension Scheme received the minimum mandatory fine of £500 (TPR announcement 29 June 2016).  An independent trustee has more recently received three maximum fines, totalling £6,000.  Alison explores this in greater detail in her article, If trustees fail they will face the consequences!

(3) TPR is consulting on a revised Compliance and Enforcement policy relating to occupational DC schemes.

Prosecution policy

TPR has issued its formal policy regarding prosecutions for criminal offences in relation to work place pensions including auto-enrolment.

Corporate transactions

TPR has called for increased powers to intervene in corporate transactions and this will be considered by the Parliamentary Select Committee as part of its enquiry into Defined Benefit pension schemes.



Generally – the Pensions Ombudsman has announced that in future it will anonymise decisions and not publish claimants' names, bearing in mind the trend towards increasing protection of personal information.



High risk SIPP investments

Mr N

May 2016

In dismissing the complaint the Ombudsman disregarded later FCA guidance, specifically referring to unregulated collective investment schemes as it was not appropriate "to apply current levels of knowledge and understanding, or present standards of practice, to a past situation".

Administrator liable

Mr D

September 2016

The Pensions Ombudsman decided the administrator of the AVC facility was liable for not explaining tax implications sufficiently to the scheme trustees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.