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.

Pension Schemes Bill

Includes provisions to regulate master trusts, and restrictions on exit charges in DC trust based occupational pension schemes.

GMPs - sex equalisation

November 2016 – the Government has just issued a Consultation on a possible method to equalise GMPs. The Consultation closes on 15th January 2017. Please see the article [hyperlink] in this Bulletin. Meanwhile, the Lloyds Bank's Union says it will lodge Employment Tribunal claims for GMP sex equalisation.

Autumn Statement

On 23 November 2016 – the Chancellor announced (1) the annual money purchase allowance would be reduced from £10,000 to £4,000 from April 2017; and (2) there will be a Consultation on "technical" changes to the UK tax treatment of foreign pensions.

Pension scams

On 5 December – DWP issued Consultation on pension scams and possible new countermeasures including ban on cold-calling, tightening of statutory transfer rules and stricter rules on schemes becoming registered pension schemes.

Draft provisions for Finance Bill 2017

On 5 December – HMRC issued Consultation on draft provisions for Finance Bill 2017. The contents of Finance Bill 2017 will be confirmed in the Spring 2017 Budget and following this the Finance Bill will be published, with a view to Royal Assent in July 2017. The draft pension provisions include a new income tax exemption for the first £500 of pensions advice provided to an employee, and significant changes to the UK tax treatment of overseas pension schemes and transfers to them.  





Statement - 10 November 2016

The National Statistician, Mr John Pullinger, has confirmed to the UK Statistics Authority that in his view CPIH (Consumer Prices Index plus certain housing costs) should become the "preferred measure of consumer price inflation" from March 2017. WB comment: This may further complicate trustee decisions re switching indices.



The Courts continue to be busy with pensions cases with many important High Court and Court of Appeal decisions due this Autumn/Spring 2017.



Recovering overpaid pension

Webber v Department for Education

October 2016, High Court

When trustees seek to recover overpayments, the 6 year limitation period for which overpayments can be recovered stops when the trustees file with the Pensions Ombudsman their defence to the member's complaint.

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

March 2017

In 2015 the Court of Appeal dismissed Mr Walker's claim to a full civil partner's pension. The Supreme Court hearing has been relisted for March 2017 and will take into account the Court of Justice of the European Union ruling in Parris v Trinity College Dublin on 24 November 2016. The European Court rejected Mr Parris' claim and held that the condition that the same sex marriage or civil partnership had to be entered into before age 60 was valid and was not discriminatory on the grounds of sexual orientation or age.

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 power, were the subject of an appeal to the Court of Appeal. This appeal has been vacated (discontinued). Apparently the parties are seeking a Court approved compromise of their dispute.


Buckinghamshire v Barnardo's

Appeal November 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 from RPI to CPI. On 2 November 2016 the Court of Appeal, by a 2 to 1 majority, upheld the High Court decision: on the specific wording of the Rules, there had to be an official replacement of index – the trustees themselves could not simply decide whether RPI had been replaced. See the full article [INSERT HYPERLINK] in this edition of our Bulletin.


British Airways v Spencer

November 2016

British Airways are seeking to overturn the decision of the BA pension scheme trustees by which the trustees gave themselves power to award discretionary pension increases, following the Government's switch from RPI to CPI for statutory purposes.

Employer's duty of good faith

Bradbury v BBC

Court of Appeal  2017

Court of Appeal hearing due in February/March 2017 – a long time to wait! The High Court 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

Court of Appeal  2017

Court of Appeal hearing not 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. What a long time this case is taking!


Besides giving evidence to the BHS Parliamentary Select Committee (please see article [INSERT HYPERLINK] 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 government 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's article this month explores this in greater detail.

Corporate transactions

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

Anti-avoidance: Database Pension Scheme

On 26 October 2016, TPR reported under Section 89, Pensions Act 2004 on how TPR's pressure resulted in the full buy-out of members' benefits.

TPR declares amending deed void

The parties completed a deed which, by mistake, converted a DB scheme to a DC scheme. TPR issued an Order declaring the conversion void as breaching members' rights under Section 67.

WB comment: where feasible, obtaining a TPR order may be much simpler than High Court rectification proceedings.

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.