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.
The Pensions Regulator (TPR) has issued a document, “Pensions of the future – a discussion on our strategy”, setting out its broad aims for the next 15 years and its intention to “put the saver at the heart of all that we do”. TPR expects to regulate fewer but larger schemes due to consolidation in the defined benefit and defined contribution markets. One of TPR’s goals is to ensure that decisions made on behalf of savers should be in their best interests. It expects diversity among those who take decisions, expects decisions to be fair and transparent, and will intervene where decisions may lead to poor quality outcomes for savers. The document is for discussion with stakeholders and feedback is requested by 16 December 2020.
TPR has further updated its COVID-19 DC guidance in relation to redirecting contributions back to a fund that had been temporarily closed (or “gated”). TPR expands on when it would expect that a member’s original fund choice would still apply and when consent should be sought. This can be a tricky area. We recommend that affected trustees take legal advice.
The government has responded to a consultation it ran at the end of 2019 regarding the introduction of standardised annual benefit statements for workplace pensions. In brief, the government has concluded that it will consult later in 2020 on proposals to compel defined contribution pension schemes used for automatic enrolment to issue annual benefit statements to members based on a simple statement template. The government will work with industry on the detailed design of the template but will use the two-page template included in the original consultation as “the starting point”. The two-page template statement could, where appropriate, be supported by supplemental and personalised information. The idea that pension statements be delivered in a specified high-visibility colour envelope to encourage people to open the statements (following the example of Sweden) will not be pursued at this time. However, the government remains supportive of a “statement season” and will consult on a mandatory approach to the timing of the issuing of annual written benefit statements.
The full list of proposed amendments to the pension schemes bill is now available on the parliamentary website. Those who wish to comment on the pension schemes bill can submit their views to the House of Commons Public Bill Committee, which will consider the bill and report back to Parliament before 5 November 2020. Early submissions are encouraged.
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.
