Pensions Weekly Update – 12 August 2020

August 2020

Here is our brief weekly summary of key legal and regulatory developments relevant to occupational pension schemes, which you might have missed, with links for further information.

  • As the economic impact of COVID-19 continues to hit schemes and sponsoring employers, The Pensions Regulator’s (TPR) chief executive, explains what trustees of defined benefit pension schemes can expect from TPR. He highlights the need for trustees to prepare to be challenged in the future for decisions they are making now, “especially if hindsight proves they made the ‘wrong’ call”. Trustees should be able to demonstrate that they obtained all relevant information, took advice when appropriate, made decisions in good faith and in accordance with scheme rules, and kept clear records.
  • GMP Equalisation Working Group, led by the Pensions Administration Standards Association, has published a Guide to GMP Communications for schemes in the early planning stage of a guaranteed minimum pensions (GMP) equalisation exercise. The guide contains tips to help trustees strike the right balance between providing too little information and providing too much (so that members may believe that GMP equalisation will have a greater impact than will be the case in reality). The guide also includes materials that trustees can use when communicating with members, such as model Q&As and a jargon buster. The latter suggests definitions for GMP equalisation terms and the group “strongly encourages” all schemes to use these definitions to promote consistency. Further guidance is promised, covering member communications relating to the implementation of GMP equalisation exercises and an extension to the jargon buster.
  • Deadlines are approaching for two important consultations. TPR’s defined benefit funding code of practice consultation closes on 2 September 2020 and the joint consultation from the UK Statistics Authority and HM Treasury on reforming the methodology of the Retail Prices Index closes on 21 August 2020.
  • We have issued part four of our #PensionsTensions series of publications, which examines the longer-term impact of COVID-19 and assigns a #PressureMeasure to key issues. Our final document in this series examines the investment experience and considers current investment challenges to be addressed. How should trustees respond to these challenges? How can pension schemes play a role in rebuilding the UK economy, and what barriers need to be overcome? In previous weeks, we have looked at the employer experience, the trustee experience and the member experience.
  • Save the date: 27 August 2020. We will be running another of our popular lunchtime pensions webinars and this time our principal focus will be #PensionsTensions and how the related #PressureMeasures may develop. Watch out for email invitations with registration information, due to hit your inbox in the next few days…

If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.

Access our global COVID-19 Coronavirus Resource Hub for guidance on key legal and risk issues for businesses.

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