The transition period following the UK’s departure from the European Union ended at 11pm on 31st December 2020, and the UK-EU trade agreement then took effect.
Many significant aspects of UK pensions law have been derived from the EU, such as several key governance requirements, the current scheme funding legislation and a great deal of anti-discrimination law. However, these have mostly been incorporated into UK law, which means that UK pensions law is largely unaffected by the ending of the transition period.
EU case law also affects matters such as the compensation levels that the Pension Protection Fund (PPF) has to offer and it’s an open question as to whether and when the UK may wish to move away from that. There are also broader areas of employment law where the footprint of EU law has been significant, such as the Transfer of Undertakings (Protection of Employment) Regulations 2006 and the age discrimination legislation. Interpretation of legislation now belongs to the UK courts and the higher courts (such as the Supreme Court and Court of Appeal) can depart from past decisions of the Court of Justice of the European Union.
Where these changes really have an effect is in the realm of scheme members and employees who either work or live overseas, who have been seconded to work in the EU or European Economic Area (EEA), or who will retire in the EU or EEA.
Specific advice and guidance will be necessary in this area. It may also be appropriate to alert scheme members that they should take their own personal advice if they plan to move and live outside the UK, as in some limited cases there may be implications for their future retirement plans.
Data protection
One area in which the EU has been significant is the protection of personal data. Personal data is any information that can be used to identify a living person and includes names, delivery details, IP addresses and HR data such as payroll details. It’s used by most organisations in their daily operations.
An example of this mattering in this context is a UK company that receives customer information from an EU company, such as names and addresses, to provide goods or services.
Some time ago, the UK Government decided to fully bring the EU basis set out in its General Data Protection Regulation (GDPR) into UK law and this was achieved by the Data Protection Act 2018.
However, ceasing to be in the EU and ending the transition period means that the UK is in scope to be treated as a third country for the purpose of personal data transfers between it and the EEA.
Following the recent UK-EU trade agreement, the UK Government has announced that the treaty agreed with the EU contains a ‘bridging mechanism’ that will allow personal data to flow freely from the EU (and EEA) to the UK for six months, until there is time for the EU to make decisions on the adequacy of the UK’s arrangements.
This should enable businesses and public bodies across all sectors to continue to freely receive data from the EU (and EEA) for now. The UK has, on a transitional basis, deemed the EU and EEA to be adequate, allowing for continued data flows from the UK to the EU and EEA.
Capita comment
As a sensible precaution while the UK awaits an EU adequacy decision, Capita continues to engage with EU and EEA organisations that transfer personal data to us, to ensure that we have appropriate transfer mechanisms in place (such as standard contractual clauses) to safeguard against any interruption to the free flow of personal data.
Please speak to your usual Capita contact if you have any questions.