Pensions Bulletin 2024/13

Our viewpoint

Newburgh Engineering – Regulator achieves £3.52m settlement

The Pensions Regulator has published a regulatory intervention report where it details the case of a sponsoring employer of a small DB scheme that was involved in a series of corporate restructurings in which significant assets were transferred to other group entities, such that when the employer went bust it was unable to support the scheme.

After an investigation, in which the Regulator issued warning notices proposing to use its Financial Support Direction powers against six corporate targets (presumably under the “insufficiently resourced” heading), the case was settled without admission of liability by the targets, but with their paying £3.52m into the scheme.  This in turn enabled the Newburgh Engineering Co Ltd Pension and Assurance Scheme, which had been in PPF assessment since October 2018, to transfer to the PPF in 2023.

The Regulator notes that the stated rationales of the restructurings included “that the proposed reorganisation gives greater protection to the property assets from any claims against the company" and to create a “saleable entity in the future … free of the pension liability”.  The Regulator also noted that a pre-pack sale of the sponsoring employer’s business to the group’s common director took place as soon as it went into administration, with the scheme entering PPF assessment.

The Regulator also says that had it not been for the asset transfers it is possible that a buyout of the scheme’s liabilities could have been secured with an insurer.  It goes on to say that, while the settlement was less than the section 75 debt of £8.84m, it represented all the targets’ cash assets and about 80% of their estimated available assets.


The Regulator will be pleased with this result, which was achieved relatively quickly.  However, it appears that this case only came to its attention in July 2018, despite the corporate restructurings taking place in 2005, 2014 and 2017.  The investigation was carried out using the Regulator’s pre-Pension Schemes Act 2021 powers which, because a Financial Support Direction could have been used, did not put the Regulator at risk of being timed out.

We have yet to see the first case under the new powers which came into operation from 1 October 2021, but should the same situation have developed it appears that the Regulator could have threatened a new “employer resources test” Contribution Notice at the time of the first corporate restructuring.

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More LTA abolition news from HMRC

HMRC’s latest pension schemes newsletter is inevitably focussed on LTA abolition which comes into operation from 6 April 2024.  Pension schemes newsletter 157 also contains reminders and some news in other areas, such as the Managing Pension Schemes service and how to migrate a pension scheme to it, Relief at Source and the Pension scheme return.

On LTA abolition, the newsletter discusses the various statutory instruments recently laid before Parliament.  It then goes through the various HMRC forms associated with QROPS transfers, highlighting the changes that will take place to them from 6 April 2024 as a result of the introduction of the overseas transfer allowance.  HMRC asks that the correct version of the forms be used when making a submission from 6 April 2024.

There is also mention of the updated Event Report but no news on when it will become available.

The newsletter concludes by setting out a new and lengthy list of FAQs on LTA abolition, to add to all those that have gone before.   Many of these have an administration focus, including on the updated Event Report, but there are also a number of promises to make more corrective changes to the legislation (separately, we have seen a consolidated list than runs to over 100 FAQs).

There is also mention of the amending regulations laid on 14 March 2024 (see Pensions Bulletin 2024/11).  We understand that HMRC is working on further amending regulations that will be laid after 6 April 2024 but backdated to have effect from this date.

Separately, HMRC is making multiple amendments to its Pensions Tax Manual to reflect LTA abolition, with a number of adjustments made in the run up to Easter.  These include the wholesale deletion of the two sections that deal with LTA issues, despite their continued relevance for pre-6 April 2024 situations.  Any changes subject to further regulations that will not be effective immediately from 6 April will not be in this manual but will be covered by pointing towards the relevant newsletters.


Busy times indeed as HMRC does its best to deliver LTA abolition not only from a legislative point of view, but also in relation to its guidance material and forms.  However, we do think that HMRC is being overzealous in culling its LTA guidance material in the Pensions Tax Manual as this will need to be referred to for quite some time into the future.

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FCA consults on modified rules and new guidance to govern pensions dashboard providers

The Financial Conduct Authority has launched a further consultation on the regulatory framework for pensions dashboard service firms.  The consultation relates to new “perimeter” guidance for firms undertaking this activity and two changes to the rules the FCA originally proposed in December 2022 (see Pensions Bulletin 2022/45).  The FCA had intended to finalise its rules in summer 2023 but this was overtaken by the March 2023-announced ‘reset’ of the deadlines by which pension schemes had to connect with the pensions dashboard.

In February 2024 regulations made operating a pensions dashboard service which connects to the MaPS dashboards digital architecture a regulated activity (see Pensions Bulletin 2024/07).  The purpose of the FCA’s new perimeter guidance is to help firms understand the scope of this regulated activity and when they will require permission to undertake it.

The FCA’s two changes to its proposed rules are as follows:

  • To require firms to present the consumer with choices for their initial next steps after viewing their pensions data on a pensions dashboard service.  The FCA is also proposing that firms provide certain communications that will help ensure consumers can take appropriate care when their selected next step takes them outside the regulated service
  • Revised data export proposals, intended to create a single, consistent route for consumers to share their dashboard data with an FCA-regulated investment adviser.  The FCA’s proposals aim to promote competition and consumer choice in the advice market

Consultation closes on 8 May 2024 and the FCA intends to publish a policy statement and final Handbook text in Q4 2024.  The FCA has not provided an update as to when it intends to be open to receiving applications from firms wishing to become pensions dashboard service providers.


It remains to be seen how many firms will be interested in providing this service, but for those that do there will be complex and lengthy rules and guidance to navigate.

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Pensions Regulator refreshes its Code and guidance material

Following the General Code coming into force on 28 March 2024 (see Pensions Bulletin 2024/12), the Pensions Regulator has now presented the Code in its final form on its website.  Instead of being a lengthy pdf, it is now presented in separate modules with the intention that it will be much easier to navigate to the relevant sections.

The ten old Codes that the General Code replaces have vanished, it now being necessary to visit the National Archives if one wants to examine them (they remain relevant for pre-28 March 2024 situations).  And the five remaining Codes that have not been replaced by the General Code, such as that on DB funding and notifiable events, are now embedded within the Code of Practice navigation.  Plus, for practical purposes, there is no distinction between the General Code and the other Codes – they are all grouped together under the heading of the Code of Practice.

The Regulator also seems to be working its way through supporting guidance material, making necessary adjustments to reflect the General Code coming into force.  For example, there have been many changes to its Scheme management detailed guidance material.  Some modules have disappeared, such as those relating to conflicts of interest and internal controls, presumably because the topics are now covered in the General Code.

There is a new module on assessing whether to report a breach to the law, replacing the module on complying with the duty to report breaches of the law, and setting out the familiar traffic light framework for whistleblowing.

The various DC modules also seem to have undergone a refresh, with minor adjustments being made to them to align the guidance with the material in the General Code.  The existing material on cost and charge restrictions for DC schemes has been separated out from the module on value for DC scheme members, and is now presented in its own module.


We welcome the Regulator putting all of its Code material into one place.  As to the changes to the guidance material, so far the Regulator has yet to make any general announcement about the changes it is making.  Hopefully, they are little more than necessary re-arrangements and adjustments to reflect the General Code and so there will be no surprises.

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Pensions Regulator provides progress report on financial stability risks

The Pensions Regulator has published a letter sent to the Bank of England’s Governor in January 2024 which sets out its progress and actions in relation to financial stability, following recommendations made in March 2023 by the Bank’s Financial Policy Committee (see Pensions Bulletin 2023/14).

The letter, which is linked to a press comment by the Regulator’s Chief Executive, Nausicaa Delfas, says that pension schemes are now more resilient to (LDI) shocks, the Regulator has built dashboards to monitor LDI resilience across both pooled and segregated mandates, and that in addition to the leverage and liquidity data being requested in the annual scheme return (see Pensions Bulletin 2024/02) it will survey the main investment consultants and a significant proportion of schemes in Q1 and Q2 2024 respectively to check that its governance and operational procedures are being implemented in line with its April 2023-issued guidance (see Pensions Bulletin 2023/17).

In relation to whether the Regulator should have the remit to take into account financial stability considerations on a continuing basis, the Government’s acceptance (see Pensions Bulletin 2023/46) that the Regulator should incorporate financial stability considerations in its decision-making and balance them with its statutory objectives is welcomed and various areas of current collaboration with the Bank are listed.

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FRC finalises its 2024/25 Plan and Budget

The Financial Reporting Council has published its Plan and Budget for 2024/25.  There appears to be little change to the draft consulted on in December, which reflected the FRC’s new remit from the Government and it not expecting to being transformed into the Audit, Reporting and Governance Authority (see Pensions Bulletin 2023/51 for further details).

The overall budget of £71.5m is £0.5m down on the December proposal, with some slight downwards adjustments as a result to some of the FRC’s levies.  The FRC also confirms its commitment to undertake a full review of its strategy and objectives in 2024-25, with a view to subsequently publishing a 3-year strategy, supplemented each year with an annual plan and budget.

The FRC also now says that, in response to stakeholder feedback, it will move to a system of quarterly consultation dates later this year, meaning that any consultations for each period will be released on the same day once per quarter.  It will also consider the impact of this year’s pre-election periods and communicate the planned consultation content and dates in due course.

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Pensions Regulator appoints three interim directors

Further to February’s restructuring announcement (see Pensions Bulletin 2024/08), the Pensions Regulator has announced new interim directors of its three new directorates.

Mel Charles, Neil Bull and Nina Blackett become the interim directors of Regulatory Compliance, Market Oversight and Strategy, and Policy and Analysis respectively.  They will remain in post whilst the Regulator recruits for the three permanent roles.

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This Pensions Bulletin does not constitute advice, nor should it be taken as an authoritative statement of the law.  For further help, please contact David Everett at our London office or the partner who normally advises you.

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