Could planned pension reforms impact Reuters pension scheme members?

There’s been a lot of discussion recently in the general and specialist pensions media about government plans to make it easier for Defined Benefit fund sponsors – the employers — to access what some in the pensions industry call “trapped surpluses,” which many DB schemes have built up in recent years.

In their pursuit of growth, the government wants to encourage sponsor companies to invest their pension surpluses, or at least part of them, to boost the UK economy. This could involve fund sponsors investing surpluses in their own companies, with the inducement being a reduction in tax paid on these surpluses to 25 pct from 35 pct

For all Defined Benefit fund members there is also an important potential gain because a surplus, or part of it, could be used to increase the pensions of both existing and future pensioners.  For example, it might be possible to use the RPF surplus to compensate for the non-indexation of pre-1997 benefits. The RPF surplus was £133 million as at 30 June last year, according to the latest Update.

The draft Pension Schemes Bill will be sent to Parliament before the summer recess starts on July 22, but there is unlikely to be any meaningful discussion of its contents until September at the earliest. The Pension Review Group will be keeping a close eye on developments.https://reuterspensioners.org.uk/planned-pension-reforms/

CASE STUDY: How good is the RPF dispute process?

PRG asked a Reuters Pension Fund member who has made use of the scheme’s internal dispute process how he found the experience.

The main takeaways: the whole process is slow but works well. It is fact driven, not overly bureaucratic and serious consideration was given to the member’s complaint.

Background to complaint

In May 2022 this member submitted a request for a retirement quotation. The timing coincided with the handover of the administration of the pension scheme to Isio from Capita, which resulted in some disruption. It took until mid-December 2022 for the member to receive a valid quotation. The member was not happy with the delay, so made a complaint to Isio requesting specific action.

Initial handling of complaint by Isio

Member’s comment:

Isio responded within a month, rejecting my request for specific action. They did provide a clear reason for the rejection, but it was based on an assumption that I knew was incorrect. A number of emails were exchanged with Isio over the next couple of months, but I failed to convince them that their initial decision was wrong.

The Internal Dispute Resolution Procedure Stage1

At the end of March 2023, the member submitted a Stage 1 Form to the Pension Fund Secretary documenting the reasons why he disagreed with the decision of Isio. The Pension Fund Secretary responded at the end of June.

Member’s comment:

I was impressed with the comprehensiveness of the response of the Pension Fund Secretary. She documented all the relevant facts, and it was evident that she had given the complaint serious consideration. She acknowledged that the reason Isio had given for rejecting my initial request was not relevant but rejected my request based on another reason. She highlighted that I had the right to appeal by making an application under Stage 2 of the Internal Dispute Procedure, which I decided to do.

The Internal Dispute Resolution Procedure Stage2

An appeal against the Stage 1 decision was submitted in August 2023 and was reviewed by the Administration Sub-committee. The chairman of the sub-committee responded within two months accepting the appeal and agreeing to the action that the member had requested Isio take.

How good is the dispute process?

Member’s comment:

Although it was frustrating that it took so long for the right conclusion to be reached, I thought the Internal Dispute Resolution Procedure worked well. It was not over bureaucratic and was fact driven. Based on my experience I think that members wishing to make use of the Internal Dispute Resolution Procedure can be confident that serious consideration will be given to any complaint they make. Ultimately there is the option of referring a claim to the Pensions Ombudsman but hopefully in most cases this should not be necessary.

https://reuterspensioners.org.uk/rpf-dispute-process/ ■