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.
A new guide has been issued by The Pensions Regulator (TPR), the Financial Conduct Authority and Action Fraud to encourage more widespread reporting of pension scam suspicions or activity. The new short guide sets out when and how reports should be made. In its corporate report 2022 to 2024, TPR states that “for trustees, administrators and providers, a failure to report suspected scams amounts to a failure to protect savers”. TPR is also encouraging more schemes to sign up to the pension scams pledge.
The government has published its outcome of consultation, along with draft regulations, in relation to proposals that the largest schemes should report on their alignment with the Paris Agreement goals. This will involve the trustees selecting and calculating a "portfolio alignment metric" for the assets of their scheme. A portfolio alignment metric is a metric that gives the alignment of the scheme’s assets with the goal of limiting the increase in the global average temperature to 1.5 degrees Celsius above preindustrial levels. The regulations are expected to be in force from 1 October 2022 and will apply to all schemes that are subject to the requirement to report in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). Updated statutory guidance in relation to climate change risks will be in force from 1 October 2022.
The government has also published Stewardship guidance for all trustees, which includes best practice guidance in relation to trustees' statements of investment principles (in force immediately) and statutory guidance on the Department for Work and Pensions’ expectations across the implementation statement, which will be effective for implementation statements prepared in relation to scheme years ending on or after 1 October 2022.
Continuing with the theme of environmental, social and governance (ESG), the Financial Reporting Council has published a consultation paper proposing to introduce a new requirement to ensure that actuaries have regard to all material risks, including the consideration of climate change and ESG-related risks, which they might reasonably be expected to know about at the time of carrying out their work.