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Overview

The Department for Work and Pensions (“DWP”) carried out a consultation exercise in 2009 on a possible approach to simplifying the disclosure requirements. This was based on the adoption of a ‘key overarching principle’ which trustees would need to take into account when interpreting the requirements of more limited prescriptive legislation.

Although the DWP has now decided not to proceed with the majority of the initial proposals, it still intends to adopt some key reforms, most notably the permitted use of electronic communications.

With this in mind, the DWP has now produced a further, more limited, consultation document with draft regulations. The consultation period ends on 1 March 2010, and the regulations are intended to come into force on 1 October 2010, with the exception of a change to the timescale for providing basic information which will come into force on 1 October 2012.

2009 Consultation

The majority of the proposals in the 2009 consultation document have been abandoned as follows:

‘Key Overarching Disclosure Principle’

The DWP proposed to adopt an ‘overarching principle’ which essentially provided that members should be given sufficient information to allow them to understand their benefits and any other relevant information which would enable them to make decisions in their own best interests.

The response to this proposal was very mixed as respondents gave different interpretations to the meaning of the proposal. Consequently, the DWP has decided not to adopt any overarching principle at this stage, although it intends to consider how future legislation can cater for some degree of prescription which will meet stakeholders’ differing needs.

Harmonisation of Regulations

The original proposal was to consolidate the disclosure requirements into one set of regulations rather than the existing position where occupational, personal and stakeholder schemes are dealt with separately. As respondents thought this could be unwieldy, the DWP has decided not to proceed with this for the time being although it is still considering whether to adopt this at a later date.

Provision of Information within a “Reasonable Period”

The DWP has decided against adopting a more flexible framework for providing information within “a reasonable period” as opposed to the existing prescribed timelimits because it has concluded that this would not confer any particular advantage.

2010 Proposals and Draft Regulations

The DWP has decided to proceed with some of the original proposals as follows:

Statutory Money Purchase Illustrations (“SMPIs”)

With effect from 1 October 2010, defined contribution schemes will be able to produce shorter, simpler SMPIs if they wish to do so. The DWP concluded that this would give schemes greater flexibility and would further engage members and help improve their understanding.

As regards defined benefit schemes, the DWP has no current plans to require mandatory annual benefit statements to be issued automatically to all members as this would not fit in with the nature of the disclosure review as a whole.

Electronic Communications

The DWP has decided to proceed with the proposal to enable schemes to use electronic communications as their default method of communication if they wish. With effect from 1 October 2010, schemes will be able to use websites and emails to discharge their obligations. However, before trustees can use electronic communcation methods for the first time, members must be notified in writing and given the opportunity to opt for continued paper communication.

Schemes can only provide information electronically if they are satisfied that recipients will be able to access and print the information.

Basic Scheme Information

The time limit for providing basic scheme information is to be reduced from 2 months to 1 month. This will take effect from 1 October 2012 to coincide with the introduction of automatic enrolment and the extension of the “joining window” from 14 days to 1 month.

Following the 2009 consultation, the DWP decided that the change in time limit should not cause schemes any difficulty.

Comment

The proposals to permit simplifed SMPIs and electronic communications as the default method of disclosure will undoubtedly be welcomed by the pensions community. The latter, in particular, will save considerable time and expense. A single set of disclosure regulations would not necessarily be any more unwieldy than the current several sets, and it is to be hoped that this will be reviewed in due course.

For more information please contact David Hosford or Rosamund Lee, or any member of Pitmans’ Pensions Department.

It has always been possible to complain to the Secretary of State (at Companies House) if you consider that a company registered subsequent to your company registration has a name which is confusingly similar to your company’s name.  However, such complaints have not, historically, been particularly successful.  This has meant that parties have had to rely on costly proceedings for passing off and/or trade mark infringement although these remedies may not be available if the owner of the later company is not trading under the name complained of.

As a result of the Companies Act 2006, Companies House has tightened its policy.  We have recently tested the effectiveness of the new policy and found that it is indeed more sympathetic to the complainant.

Under the new policy, a company can bring a complaint to the Secretary of State that another company has registered itself under a name which is the same as or “too like” its own name, or changed its name to one which is “too like” it.  The complainant need not show passing off Read the rest of this entry »