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 Office for National Statistics has published its provisional analysis of employee workplace pension participation in the UK in 2021. The participation rate is 79% (22.6 million employees) in April 2021 (up from 78% in 2020). It is noted that membership trends for 2020 and 2021 are subject to some uncertainty due to the number of employees on furlough under the COVID-19 Job Retention Scheme.
Recent press reports have noted the increasing risk of challenge faced by employers and trustees to provide sharia-compliant pension schemes. While for those schemes that provide defined contribution benefits, there is the option of reviewing the scheme's statement of investment principles with a view to offering members the choice of one or more sharia-compliant investments, trustees of defined benefit pension schemes may find it more difficult to provide a sharia-compliant pension scheme while continuing to act in the best interests of all members. This is especially the case where the scheme is closed to new contributions (as additional voluntary contributions have traditionally been the way to address this issue). Like environmental, social and governance investing, this is a developing area that employers and trustees alike may need to consider.
The Institutional Investors Group on Climate Change has launched its net zero stewardship toolkit. The aim of the toolkit is to assist investors, including pension scheme trustees and managers, to implement a successful stewardship and engagement strategy with the companies in which they invest, resulting in those companies taking the necessary action to produce net zero transition plans.
The PASA Cybercrime and Fraud Working Group has published guidance on pre-employment vetting for pensions administrators taking on new hires. It highlights the risk of fraudulent activity involving employees of administrators and suggests the types of pre-employment checks that can be carried out, and the information that can be verified, to mitigate this risk. It also provides guidance on weighing up whether such checks and vetting are proportionate and relevant to the level of risk associated with the position being recruited.