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 Regulator (TPR) has published information for trustees relating to the Ukraine conflict, which provides guidance around TPR's expectations. TPR expects trustees to take advice when considering a scheme's investment and risk management and also flags that trustees should be monitoring any potential impact on covenant, which might arise as a result of direct impact on the supply chain, or through broader macroeconomic factors, such as rising fuel prices or foreign exchange risks. TPR suggests that trustees communicate with members to let them know what actions the trustees are taking. TPR also asks trustees to let TPR know of any significant challenges that they or a sponsoring employer are facing as a result of the conflict, so that TPR can form a clearer picture of the impact on pension schemes.
The Pension Protection Fund (PPF) has also issued a statement in relation to Ukraine. The PPF reassures members and levy payers that its fund has negligible exposure to Russian investments and says that it will continue to monitor the position and is aware that recent volatility in financial markets could have an impact on the defined benefit pension schemes that it protects.
In our weekly update of 19 January 2022, we noted that the government had published its outcome of consultation in relation to the "stronger nudge". We also noted that regulations introducing nudge measures would come into force on 1 June 2022. Those regulations include requirements for trustees, in certain specified circumstances, to offer to fix an appointment with Pension Wise for members wishing to access or transfer flexible benefits (broadly speaking, defined contribution (DC) and cash balance benefits). TPR has now updated its guidance accompanying its DC code of practice to reflect the stronger nudge requirements.
March and April are busy months in the pensions calendar.
This year, the international data transfer agreement and international data transfer addendum are expected to be in force from 21 March 2022 (see our weekly update of 2 February 2022).
From 1 April, the fraud compensation levy ceiling will increase to 65p per member for authorised master trusts and £1.80 per member for all other occupational pension schemes. This follows on from the government’s consultation in November to increase the levy ceiling (see our weekly update of 3 November 2021).
The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2022 will come into force on 6 April 2022, implementing a de minimis on the charging of flat fees as part of a combination charge. This will ensure that a member’s pension savings at or below £100 will be protected from flat-fee charges. The regulations apply in respect of schemes providing DC benefits that are used for automatic enrolment. The Department for Work and Pensions has also updated its guidance on the charge cap.
Also from April, changes to the notifiable events regime are expected to be in force although final legislation has yet to be published (see a blog by Patricia Bailey, for further information on the expected changes).
And last, but not least, do not forget the 31 March 2022 deadline for making PPF levy contingent asset submissions. If you require any assistance with these or wish to explore whether to re-execute a contingent asset using an exclusive jurisdiction clause (see our weekly update of 12 May 2021 for a further explanation of this issue), please get in touch with your usual firm contact.
Recent events mean that more pension scheme trustees and administering authorities might find their investment strategy, and in particular their environmental social and governance policy, being challenged. Here is our handy flowchart, which provides an overview of actions that you might want to take when responding to such a challenge.
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.