Pensions Weekly Update – 15 June 2022

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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.

David Fairs, Executive Director of Regulatory Policy, Analysis and Advice at The Pensions Regulator (TPR), has published a blog setting out TPR's approach to the first round of reports being prepared by the largest pension schemes in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). Pension schemes with £5 billion or more of relevant assets, along with authorised master trusts, must prepare and publish their first TCFD report within seven months of the end of the scheme year that was underway on 1 October 2021. TPR is expecting there to be around 100 such reports. TPR will be reviewing the reports, but David Fairs has said that TPR will be mindful of the challenges faced by trustees in preparing those reports, such as the availability and quality of data. In particular, he says that TPR does not anticipate it will be necessary to issue any penalty notices to trustees of schemes that publish their TCFD reports in the first wave, other than where the report has not been published (which would result in a mandatory penalty of at least £2,500) or where it is clear that trustees have not made a genuine effort to comply with the TCFD requirements (which could result in a discretionary penalty of up to £50,000).
TPR issued its consultation response to the new code of practice for the authorisation and supervision of collective defined contribution (CDC) pension schemes. The final code was laid before Parliament on 9 June 2022 and is expected to complete the legislative process in 40 days. This will allow applications to be made to TPR for authorisation to operate CDC schemes from 1 August 2022 (the date that the regulations come into force).
TPR has published its corporate plan for 2022 to 2024. This is an update to TPR's corporate three-year plan published last year. TPR says that it continues to focus on the retirement saver through the delivery of five strategic priorities: security, value for money, scrutiny of decision-making, embracing innovation, and bold and effective regulation. It sets out its key performance indicators for measuring whether it achieves its priorities, as well as summarising various target dates. In relation to its new defined benefit funding code, TPR is aiming to launch a second consultation in autumn 2022, with the code becoming operational from September 2023. During 2022-23, TPR will continue to implement climate change legislation and will start to review scheme SIPs and implementation statements, including those of smaller schemes not subject to the TCFD reporting requirements. In relation to dashboards, TPR will consult on a compliance and enforcement policy and develop its internal systems and processes, ready for regulating compliance from June 2023.
The Department for Work and Pensions has issued a call for evidence so that it can understand what information and support savers in occupational pension schemes expect when they reach retirement, and to understand what support is already being provided by occupational pension schemes. The call for evidence closes on 25 July 2022.
In our latest #AttentionPensions video, partner Catherine McKenna considers the Pension Schemes Act 2021, focusing on TPR’s new powers and the implications for corporates and trustees.
A recording is available of our recent 30-minute webinar on TPR’s single code of practice, in which we share our experiences of different approaches to compliance.