Pensions Weekly Update – 20 October 2021

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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 Pensions Dashboards Programme has issued a summary of the responses to its call for evidence on dashboard “staging” (i.e. the sequencing of mandatory dashboards duties applying to pension schemes and providers). The responses will inform the work of the Department for Work and Pensions (DWP) and the regulators. A consultation on dashboard staging is expected by the end of the year.
The DWP has issued its consultation response on simpler annual pension benefit statements along with statutory guidance, which includes an illustrative template. The new requirements will come into force on 1 October 2022 (rather than 6 April 2022, which was the date proposed in consultation). Trustees or managers of defined contribution schemes that provide money purchase benefits only and are used for automatic enrolment will be required to issue member statements that are a maximum of one double-sided sheet of A4 size paper, with additional information signposted. Simple, jargon-free language should be used and adoption is encouraged on a voluntary basis by schemes not in scope.
The Pension Protection Fund (PPF) has published its annual report for 2020/21. The PPF reports that it has weathered the pandemic well so far, with reserves almost doubling over the year from £5.1 billion to £9 billion and assets under management of £38 billion as at 31 March 2021. The total number of PPF members and FAS members at the end of the financial year was 288,042 and 145,938 respectively. The PPF is also responsible for the Fraud Compensation Fund (FCF). The report states that the FCF (which is funded by a separate levy) does not have sufficient funds to meet all of the anticipated claims that it is likely to receive following clarification by the courts that certain pension schemes, which were set up as part of a scam, are eligible to claim against the FCF. Consequently, a bill is currently passing through Parliament and had its final reading yesterday, which, if passed, would allow the government to loan money to the PPF to fund those claims.
The government has published a roadmap to sustainable investing. It sets out the government’s strategy for mandating UK sustainability disclosure requirements (referred to as SDRs) across the UK economy. For occupational pension schemes, the proposal is that the SDRs will be combined with the existing reporting requirements for the largest pension schemes in relation to climate-related risks and opportunities. There will be a consultation during 2022 and (subject to consultation) implementation is planned for the next two to three years for occupational pension schemes with assets of £5 billion or more (and presumably authorised master trusts), followed at a later date by schemes with assets of £1 billion or more.
The Chancellor will deliver his Autumn Budget on Wednesday 27 October 2021. We hope that there will be no unexpected announcements affecting the taxation of pension schemes. A period of status quo would be welcome.
Finally, if you have not already done so, we would be grateful if you could spare a couple of minutes to share your experience and views on the progress of guaranteed minimum pension equalisation projects by completing our survey (individual submissions will be kept confidential).