Legal News

As Winston Churchill observed at the Lord Mayor’s Luncheon in 1942, this is no finale—nor even the beginning of one—more likely the end of the opening chapter. So it is with the FCA’s Consumer Duty. A torrent of imagery has been offered, yet those delivering change or advancing board reporting gain scant practical direction: boiling frogs boiling kettles, not oceans golden threads the art of the possible The last two years of implementation mark only the first stage of a wholesale mindset shift for firms—and for the FCA—across retail markets. With its outcomes focus, the Duty requires firms to define what ‘good’ looks like for their business and the processes most likely to secure positive results for all customers. Meanwhile, the FCA is starting to close the gaps, setting a cadence of studies and feedback that appears likely to...

Audit Reform and Corporate Governance Bill After lengthy delays, the draft Audit Reform and Corporate Governance Bill proposes scrapping the Financial Reporting Council ( FRC) and creating a stronger watchdog, the Audit, Reporting and Governance Authority ( ARGA), intended to prevent major corporate collapses. It featured in the King’s Speech in the House of Lords during the state opening of Parliament. On 17 July 2024, the FRC said it would collaborate with the Department for Business and Trade on the draft law, conceding there are ‘serious gaps in the regulatory toolkit’ that have needed reform for a long time. Richard Moriarty, the chief executive of the reporting council, warned that without these changes the regulator is akin to a sheriff for only half the county, working with powers that are too weak. Notable shortcomings under the FRC driving the draft...

Gateway tests On 17 July 2024, the Society of Pensions Professionals ( SPP) reported that a poll of 300 event participants showed 53% in favour of applying the tests to any transaction involving the planned state-backed consolidator. Gateway tests form part of the interim rules governing commercial superfunds. They stipulate that a superfund transaction may proceed only when a pension scheme cannot presently secure a buyout and has no realistic near-term prospect of doing so, and only when the deal increases the probability of members receiving their full benefits, as set out in the interim regulations currently......

In this issue: King’s Speech Automatic enrolment Daily and weekly news alerts Dates for your diary Trackers King’s Speech Government outlines new Pension Schemes Bill in King’s Speech The Pension Schemes Bill, set out in the King’s Speech and intended to extend and apply across Great Britain, covers (among other matters): long-anticipated legislation for commercial superfunds. The superfund market is currently operating under a temporary regime introduced in 2020. One superfund— Clara Pensions—has completed two transactions so far, while other participants have voiced concerns about uncertainty and fluid requirements. For more detail, see Practice Notes: the DWP’s permanent regime for DB superfunds and TPR’s interim regime for DB superfunds measures to weed out small, under-performing defined contribution pension schemes via a new Value for Money ( Vf M) framework. New Vf M powers for the Pensions Regulator ( TPR) were first...

The Pension Schemes Bill Presented in the King’s Speech and set to extend across Great Britain, the Pension Schemes Bill introduces, among other elements, long-anticipated rules for commercial superfunds and a new value-for-money regime intended to weed out small, under-performing defined contribution arrangements. It is billed as ‘designed to increase the amount available for pension savers and could help an average earner, who saves over their lifetime in a defined contribution scheme, to have over £11,000 more in their pension pots with which to secure their retirement income.’ These steps build on proposals first trailed by the former Conservative administration and follow years of engagement with the industry. During the State Opening of Parliament, King Charles confirmed: ‘ Bills will be brought forward to strengthen audit and corporate governance, alongside pension investment.’ Yet several anticipated changes are absent, notably the move to make the...

Wright and another (liquidators of BHS Group Ltd and other companies (all in liquidation)) v Chappell and others [2024] EWHC 1417 ( Ch) What are the practical implications of this case? This is an important judgment that maps the many risks and potentially competing obligations confronting directors as they try to navigate a distressed company away from insolvency, where the prospect of failure can shift from possible, to probable, to inevitable. The result on the trading misfeasance claim shows that the moment when liability can arise for directors who do not take account of creditors’ interests and who fail to move straight to administration can be identified, even if the criteria for a wrongful trading claim (under IA 1986, s 214) are not yet fulfilled. It remains to be seen how the court will ultimately assess equitable compensation for that aspect of the...

Gianni's Glasgow Ltd v The Pensions Regulator [2024] UKFTT 507 ( GRC) What are the practical implications of this case? This ruling will interest specialists in the pensions regulatory arena and, more broadly, regulatory practitioners. It adds to the examples of situations where the FTT has intervened after TPR imposed penalties for auto-enrolment non-compliance. The tribunal was notably critical of TPR’s conduct, stating its approach was ‘fundamentally at odds with that of a competent regulator’. The judge’s discussion of how TPR should shape an appropriate regulatory response—considering the causation of the breach, the appellant’s actions on discovering it, and the effect on employees—offers practical guidance for those advising clients in comparable circumstances. In addition, the judge’s description of the EPN regime under section 41 of the Pensions Act 2008 ( PA 2008) as a device to encourage compliance will be relevant to...

Cofal Ltd v Pensions Regulator [2024] UKFTT 578 ( GRC) What are the practical implications of this case? It is the second occasion in three weeks that the First-tier Tribunal—specifically Tribunal Judge Hughes—has set aside penalties imposed for auto-enrolment non-compliance, and, in doing so, has explicitly taken the Pensions Regulator to task for failing to act proportionately and for misunderstanding the extent of its own powers on review (see also Gianni’s Glasgow Ltd v Pensions Regulator [2024] UKFTT 507 ( GRC), 17 June 2024). From his remarks in this matter, the judge’s view appears to be that the Regulator has lost sight of the fundamental purpose both of the regulatory framework and of its own existence: ensuring that employers fulfil substantive obligations to enrol staff into a qualifying pension scheme and to pay employer...

WASPI congratulated Emma Reynolds on becoming Pensions Minister. Yet, in a post on X on 11 July 2024, the campaign urged Reynolds to advance, without delay, the proposals the Work and Pensions Committee ( WPC) set out in May 2024. Members of the cross-bench panel detailed how to provide redress for women born in the 1950s who were hit by the government’s poor communication of rises in the state pension age. The message added that they look forward to collaborating with her on urgent consideration of the Parliamentary and Health Service Ombudsman’s recommendations on WASPI compensation, alongside rapid delivery of a straightforward scheme as described by the Work and Pensions Committee and Stephen Timms......

Timms will be tasked with overseeing a major regulatory overhaul of the UK's £25trn ( US$3.2trn) retirement savings sector if he is also confirmed as next pensions minister. Early calls must be made on the much-delayed defined benefit pensions funding code, alongside putting into effect legislation on automatic enrolment. Timms was returned to the House of Commons on 5 July 2024 for the east London seat of East Ham with a 51% majority. He has previously served twice as pensions minister in Labour administrations—first in 1999, then from 2005 to 2006. Since 2019, he has chaired the parliamentary Work and Pensions Committee. During his tenure, the committee carried out forensic investigations into pensions freedoms, the liability-driven investment fiasco and the issue of pensions adequacy. In a landmark report in September 2022, the committee cautioned that six in ten Britons were not saving...

Aegon, the Dutch pensions provider and insurer, said it 'seems too early' for the newly elected Labour Party to place a fresh pensions bill in the King’s Speech, to be delivered in the Commons by King Charles on 17 July 2024. The address, which signals the start of parliament, is drafted by the government and outlines its legislative and policy aims for the coming term. Kate Smith, head of pensions at Aegon, warned that a measure for the retirement savings arena is unlikely to appear at this point. ‘ It’s more probable next year, once the Labour government, with a new pensions minister, has had time to conduct its promised “pensions review” (alongside weighing other policy work already in train) and chosen what to continue, alter or drop’, Smith said. Labour pledged such a review in its campaign ahead of the 4 July 2024...

The SPP has written to Reynolds following her appointment to caution against taking hasty action without consulting with the sector. On 9 July 2024, Reynolds became Parliamentary Secretary, with responsibilities across two Whitehall departments: HM Treasury and the Department for Work and Pensions ( DWP). The following evening, 10 July 2024, she announced on platform X that she had been appointed Minister for Pensions......

Aegon reported that its commissioned study pointed to a clear split in public sentiment about future finances following the 4 July 2024 general election, with under‑50s more upbeat than older adults. According to Aegon, 24% of those younger than 50 felt more confident about long‑term financial plans after Labour’s sweeping win. The poll of 2,000 adults, conducted by Opinium for Aegon in July 2024, also revealed that 15% of under‑50s were less positive about the outlook for their finances, as indicated in the research at that time......

In this issue: Key government updates post- General Election 2024 Disputes and litigation Master trusts Pensions Administration Collective defined contribution schemes Daily and weekly news alerts Dates for your diary Trackers Key government updates post- General Election 2024 After the General Election on 4 July 2024, the UK now has its first Labour administration since 2010. The government has already begun issuing announcements, with further details anticipated in the King’s Speech on Wednesday 17 July 2024, when Labour is expected to outline its initial legislative programme. Pension appointments in the new government Government appointments commenced on 5 July 2024. In the first wave, Liz Kendall MP was confirmed as Secretary of State for Work and Pensions. She will head the Department for Work and Pensions ( DWP), having served as shadow secretary since September 2023. On the evening of 9 July...

The panel of justices at the appellate court decided, in a unanimous opinion, that the effort by the BBC to reduce its rising costs in the BBC Pension Scheme (the Scheme) undermined the interests of its members. The dispute focused on interpreting a provision within the Scheme’s governing deeds, which safeguards members from changes impinging on their ‘interests’. Justice Kim Lewison observed that, when considering if an active member possesses an interest in the particular elements of the benefit design challenged in the claim form, his conclusion—mirroring the judge’s—was affirmative. The case was closely fought over this point of construction within the Scheme’s legal deeds in question......

A £7.3bn wealth fund would catalyse investment and support the modernisation of the industry, Reeves said. Pension schemes will also be urged to prioritise backing domestic firms, while the wealth fund is intended to channel capital into ports, gigafactories and steelworks. ' We will focus on the pensions system to drive investment into homegrown British enterprise and to secure better returns for pension savers,' Reeves said. According to Reeves, the Treasury will undertake a comprehensive evaluation of the government's fiscal inheritance. She underlined that the government continues to rule out fresh tax rises or large-scale spending splurges. ' We face a legacy of 14 years of chaos and economic irresponsibility. That is why, over the past weekend, I directed Treasury officials to deliver an assessment of the condition of our spending,' Reeves said in a speech at the Treasury in...

Neil Bull, executive director of market oversight at TPR, said the regulator is widening its supervision of retirement plans, concentrating on their investments, data quality and standards. He noted it will begin examining closely how a master trust’s investment approach serves savers—and will put providers under scrutiny. TPR will look into how a master trust aims to achieve the strongest long‑term returns, Bull added, and will scrutinise its investment governance and investment decision‑making. Bull also said the regulator will request ‘deep dives’ into the systems that master trusts use......

International Distribution Services plc said that it will launch the Royal Mail Collective Pension Plan on 7 October 2024. So-called CDC arrangements, which share risk, remain fairly novel in the UK at present, yet are very widely used overseas. Contributions within these pensions flow into a broad common fund, instead of building a personal savings pot for each member. The Pensions Regulator approved the Royal Mail Collective Pension Plan in April 2023, granting formal authorisation. However, the Royal Mail launch has faced delays up to now......

On 3 July 2024, Lane Clark & Peacock LLP ( LCP) reported that 162 of 226 bulk annuity transactions in 2023 were classified as lower-value deals. LCP said this eased anxieties that intensifying demand is edging out the market’s smaller end. The consultancy also highlighted a rise in micro-deals under £10m during 2023, with 58 completed, compared with 37 in the preceding year, as LCP also noted then......

Clayson and Others v Ministry of Justice and Another [2024] EAT 99 What are the practical implications of this case? This judgment underscores the difficulties that can emerge when evaluating complaints of less favourable treatment where the structure of pension provision has altered markedly over time. In short, the claimants argued that, upon the introduction of JUPRA from 1 April 1995, they should have enjoyed the same transitional protection as circuit judges already appointed before that date. The Employment Tribunal, however, found as a matter of fact that, for JUPRA’s purposes, the offices of recorder and circuit judge were distinct, and that if a pension scheme had then existed for fee‑paid (ie, part‑time) judges, including recorders, it would have been different from the JPA scheme. Such a scheme was later applied retrospectively for the claimants while they served as recorders, with benefits on terms...