Pension trustees' agenda: key legal issues September 2020


There are three key legal issues we recommend trustees to consider this Autumn.

  • Review your data protection procedures to protect members from the implications of cyber crime.
  • Start your GMP equalisation project.
  • Be aware of the effect of the new company moratorium procedure under the Corporate Insolvency and Governance Act 2020.
Risk

Data Protection and cyber crime

  • Remain vigilant against cyber crime scams, including phishing attacks and ensure your trustee training is up to date;
  • Be COVID aware - review GDPR working from home policies for your advisers and check how trustees are keeping data secure;
  • Review and update your GDPR policies and procedures;
  • Ask administrators and advisers how they are dealing with data transfers to the US following the recent Schrems II judgment;
  • Remember Brexit – after 31 December 2020 UK will recognise transfer of data from EEA countries (EU + Norway, Iceland and Liechtenstein) but the European Commission may require additional safeguards;
  • Consider a data sharing agreement with the employer to help data transfers for buy-in/buy-out and GMP equalisation.

Find out more about the data protection landscape for pensions trustees.

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GMP equalisation project

  • Ensure the data reconciliation is completed;
  • Review and clean up your common and conditional data;
  • Review the new guidance from HMRC on lump sum payments, annual allowance and lifetime allowance protection;
  • Remember the HMRC guidance does not cover conversion of benefits, the so-called “D2 option” – legal advice must be sought;
  • Watch out for the Lloyds 3 judgment on how to deal with transfers.

Read the latest HMRC guidance.

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Corporate Insolvency and Governance Act 2020

  • New moratorium procedure for companies, if company could be rescued as a going concern – can last for up to one year with creditor or court consent;
  • Moratorium does not trigger a s75 pension debt or a PPF assessment period, as it is not a qualifying insolvency event, so trustees could be in limbo;
  • New super-priority ranks ahead of trustee unsecured claims eg deficit recovery contributions;
  • Trustees’ votes as creditors can be disregarded if the court sanctions a restructuring scheme and other creditors agree (known as a “cram down”).

Read more about the Corporate Insolvency and Governance Act 2020 [PDF download].


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