Pensions Weekly Update – 9 February 2022

Authors:

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.

In its Levelling Up white paper, published on 2 February 2022, the government says that there is huge potential for institutional investment (including the £3.5 trillion of pension fund assets) to support levelling up, across infrastructure, housing, regeneration and SME finance. The government intends to work with Local Government Pension Scheme funds to publish plans for increasing local investment, including setting an ambition of investing up to 5% of assets in projects that support local areas. The government also re-states its commitment to reforming the charge cap applying to defined contribution schemes used for automatic enrolment, to remove barriers to investing in illiquid assets. The most recent consultation from the Department for Work and Pensions (DWP) on the charge cap closed last month and a response is expected “in the coming months”.
A Joint Working Group set up by the Pensions and Lifetime Savings Association (PLSA), the Association of British Insurers (ABI) and the Investment Association (IA) have published a Carbon Emissions Template (CET), which aims “to help pension schemes meet their obligations under the Climate Change Governance and Reporting Regulations, and associated DWP Statutory Guidance, and to help insurers and investment managers fulfil their obligations under the FCA’s new ESG Sourcebook as set out in PS21/24”. The CET is intended to be used to provide data for use by pension schemes in relation to their scheme years ending 31 December 2021 and contains separate data specifications for Segregated Mandates and Pooled Funds.
The DWP has published the results of the annual review of the automatic enrolment earnings trigger and qualifying earnings bands for 2022/23. The earnings trigger will remain frozen at £10,000. The lower earnings threshold will be frozen at £6,240 (breaking the link with the lower limit for National insurance contributions) and the upper earnings threshold will be frozen at £50,270.
Do not forget to register for our webinar “Environmental, Social and Governance Risks and Opportunities: Practical Considerations for UK Pension Schemes” on 17 February 2022 at 10 a.m. The webinar will examine practical governance considerations for pension schemes in connection with the adoption of their ESG/Responsible Investment policies, with a particular focus on how to prepare for and address challenges and enquiries relating to such policies.

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