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 Pension Schemes Act 2021 (Commencement No. 5) Regulations 2021 came into force on 13 December 2021. The regulations bring into force certain provisions relating to collective money purchase schemes, including a requirement for The Pensions Regulator (TPR) to produce a code of practice setting out the process for obtaining authorisation as a collective money purchase scheme.
The Pension Protection Fund (PPF) has published its purple book 2021, analysing data on 5,215 defined benefit (DB) pension schemes that are eligible for PPF protection. The book is available to download and has an interactive function, making it easy to create graphs, charts and tables. The PPF notes that in the year to 31 March 2021, the section 179 funding levels of schemes within its universe improved to a surplus of £46.9 billion compared to a deficit of £90.7 billion in the previous year.
TPR has published its annual landscape report on UK DB and hybrid schemes. The report is based on information extracted from pension scheme returns as at 31 March 2021, covering 5,522 pension schemes. This number differs from the schemes covered by the purple book because it includes some schemes that are not eligible for PPF protection, such as those covered by a Crown guarantee. The report compares data from 2012 through to 2021. In 2012, 48% of schemes were closed to new members and 28% were closed to future accrual. By 2021, 38% of schemes were closed to new members with the percentage of schemes closed to future accrual having increased to 48%.
It is expected that pensions dashboards will be up and running from 2023. Once a pension scheme reaches its staging date, trustees will be required to compare and match "find requests" from users of the dashboard against the records that the trustees hold. The Pensions Administration Standards Association has published data matching convention guidance, which is designed to help trustees decide how to make matching decisions.
TPR has published a blog in which Nicola Parish urges trustees to remain vigilant. She points out that we are living in challenging times and while government assistance to employers has been generally successful in keeping the level of distressed employers to a minimum, for some employers whose sales were affected, the effects are present in the level of debt. This might mean that other impacts such as supply chain problems cannot be easily absorbed by an employer. As part of a regulatory initiative, TPR says that it has contacted more than 400 DB schemes to check they have considered the risk that their sponsoring employer's ability to support the scheme has weakened. More in-depth engagement has been carried out with a further 30 schemes identified as being at greater risk of a weaker employer covenant.
Look out for our festive pensions quiz 2021, which has a different format this year. The closing date for entries is 5 p.m. on Wednesday 22 December 2021. We look forward to marking your entries and catching up with many of you over quiz submissions!
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.