Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes, which you might have missed, with links for further information.
The government has responded to a report from the Treasury Committee on “tax after coronavirus”. The committee had put forward a series of recommendations on tax reform, including a review of pension tax relief. The government stated “Changes to pensions tax relief in recent years have aimed to strike a balance between allowing the vast majority of savers to make significant tax-free pension savings and targeting incentives to save on those who most need government support to save for retirement. Altering this balance could have profound and far-reaching impacts, and so while all tax reliefs are kept under review, more radical changes to pensions tax relief would require careful consideration.” The government is, however, reviewing the anomalies stemming from the net pay and relief at source systems and the impact on low earners, in line with its manifesto commitment.
The government has published its outcome of consultation on taking action on climate risk. It will proceed with requiring the largest schemes (starting with those with more than £5 billion of assets) and master trusts to undertake governance and reporting in relation to the effects of climate change from 1 October 2021. It has also issued its draft statutory guidance relating to the governance and reporting of climate change risk. The guidance will apply to those larger schemes and master trusts that are required to undertake governance and reporting requirements in line with the recommendations of the Task Force on Climate-related Financial Disclosures from 1 October 2021. The guidance will not come into effect until the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 and the Occupational Pension Schemes (Climate Change Governance and Reporting) (Miscellaneous Provisions and Amendments) Regulations 2021 come into force.
Trustees are facing ever increasing, and conflicting, pressures in relation to funding and investments (see Part 2 of our #PensionsTensions: New Dimensions factsheets). On the one hand, there is a push to make it easier and more desirable for pension trustees to undertake social impact investing, which usually means investing in illiquid assets. On the other hand, The Pensions Regulator (TPR), in a recent blog, highlights the need for trustees to monitor and manage their scheme liquidity requirements, noting that illiquid investments are unlikely to be suitable for all scheme types and that the benefits and risks should be considered as part of an integrated approach.
The Money and Pensions Service (MaPS) is rebranding as MoneyHelper. The legacy brand of The Pensions Advisory Service (TPAS) will become MoneyHelper. Pensions Wise, however, will continue to be known by the name Pensions Wise. The corporate name will continue to be MaPS. The target date for the full re-launch is 30 June 2021. In due course, trustees will need to update their member communications to signpost the new website address of www.moneyhelper.org.uk. Any existing references to TPAS will need to change to MoneyHelper, although it is expected that these would have been updated to MaPS in any event. In the short term, visitors to the existing websites will be automatically redirected to the new website.
In the third of our #PensionsTensions: New Dimensions factsheets, we focus on key risks in administration and systems. Is your scheme’s risk management function up to date and robust in these areas? Our factsheet contains some hints and tips. Look out for our fourth factsheet tomorrow, which will address the current tensions in trusteeship and governance.
Look out for your email invitation to join our webinar on 1 July 2021, which will examine how pension scheme trustees can adopt a proportionate approach to meeting the governance standards set out in TPR’s draft single Code of Practice.
Watch out for the issue of our camping-themed Summer Hot Topics in Pensions, in which we will highlight some of the latest developments in UK pensions.
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.