Pensions Weekly Update – 2 February 2022

February 2022
Region: Europe

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 Department for Work and Pensions (DWP) has published its consultation on the draft pensions dashboards regulations. The consultation proposes that schemes will connect to the "digital architecture" (which simply means the Money and Pensions Service (MaPS)) in three cohorts – generally speaking, large schemes and master trusts would connect between April 2023 and September 2024, medium-sized schemes would connect between October 2024 and October 2025 and the smallest schemes would connect from 2026. A large scheme would be one with 1,000 or more members (excluding pensioners). It is proposed that public sector schemes, however, would not have to stage before October 2023 owing to the operational difficulties of implementing recent age discrimination judgments before that time. A medium-sized scheme would be one with between 100 and 999 members (excluding pensioners). It is likely that trustees and administrators will still have some work to do in order to be able to connect with MaPS by their staging date. At that point, they must be sufficiently automated to deal with “find data” (which is the personal data provided by individuals) and “view data” (which is the data returned to dashboards by schemes) within the requisite deadlines. Most view data must be available instantaneously. Where the data includes the value of a benefit, however, and no benefit statement has been produced in the preceding 12 months, it is proposed that administrators would have three working days (and 10 working days in relation to defined benefits) to respond. The Pensions Regulator (TPR) will have enforcement powers, with financial penalties for non-compliance being up to a maximum of £5,000 for individuals and £50,000 for corporates. The consultation runs to 137 pages and it closes on 13 March 2022.
  • The Pensions Dashboards Programme has published information on its standards to assist with the DWP consultation.
  • A new international data transfer agreement (IDTA), international data transfer addendum to the European Commission’s standard contractual clauses (the Addendum) and a document setting out transitional provisions as to the use of the current standard data protection clauses for international transfers were laid before Parliament on 28 January 2022. If no objections are raised then these documents will come into force on 21 March 2022. Why is this of interest to pension scheme trustees and scheme managers? The IDTA and the Addendum will replace the current standard contractual clauses that many pension scheme service providers rely on to demonstrate that international transfers of pension scheme personal data comply with the safeguards set out in data protection legislation. Many of these service providers will, therefore, have to update those contractual clauses, in line with the new documentation. For more background information, see the statement from the Information Commissioner’s Office (ICO) and relevant pages on the ICO website. Where trustees and scheme managers know their scheme’s personal data is transferred outside the UK (as revealed by their data mapping exercise) then additional due diligence is also needed to ensure compliance.
  • TPR has published additional information for trustees and administrators completing the pension scheme return. The information explains what is new this year, including a requirement for defined benefit and hybrid schemes to submit some information by way of a separate online form, i.e. not via Exchange. New questions include a requirement to provide links to a scheme's online statement of investment principles and climate change report (if required) and information on the trustee assessment of the employer covenant grading. Hybrid schemes will be required to provide a link to the publicly available extracts from the chair's statement and information on the value for members assessment.
  • TPR has issued its annual defined contribution (DC) statistics publication, which provides a high-level snapshot of the current landscape of occupational DC trust-based pension schemes in the UK. Steady consolidation of the DC market continues. The 36 authorised master trusts now account for almost £80 billion in assets.
  • The Pensions Ombudsman has announced that it has established a dedicated pensions dishonesty unit to investigate allegations of serious breaches of trust, misappropriation of pension funds and dishonest or fraudulent behaviour by pension scheme trustees. The unit has been set up as a pilot project and aims to “hold the wrongdoers responsible for the unlawful gains they have made and ensure they repay these monies to the scheme members”.

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

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