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.
Regulations are expected to come into force on 1 October 2022, which will impact trustees' reporting obligations. In June 2019, the Competition and Markets Authority (CMA) published an order in connection with the investment consultancy and fiduciary management market. Among other things, the order placed obligations on pension trustees to set objectives for investment consultants, to undertake a competitive tender exercise where 20% or more of a scheme's relevant assets were to be (or already were) subject to fiduciary management and to report compliance with the order to the CMA. In July 2019, the Department for Work and Pensions (DWP) published for consultation draft regulations incorporating the CMA order into pensions legislation. The DWP has now published its outcome of consultation and the final form of the regulations have been laid before Parliament. The DWP has taken on board some observations from the industry, including that asset-backed contribution arrangements, as well as buy-in policies, should be excluded from the calculation of manageable assets. The DWP has also confirmed that the 20% threshold will apply in respect of the whole of a sectionalised scheme, rather than in respect of each segregated section. The DWP regulations do not apply in respect of pension schemes that do not have trustees, including statutory public sector schemes. The DWP has clarified that the DWP's regulations (unlike the CMA order) do not extend to the Local Government Pension Scheme (LGPS). The DWP reasoning for this is that guidance and regulations in relation to the LGPS are the domain of the Department for Levelling Up, Housing and Communities (which has promised the LGPS a bumper consultation on TCFD, levelling up, pooling and related matters, which is eagerly expected but may not arrive until the autumn). Under the DWP regulations, The Pensions Regulator will take over from the CMA in monitoring and enforcing compliance by pension trustees. Instead of making an annual compliance statement to the CMA, trustees will, therefore, confirm compliance to TPR via additional questions included in the pension scheme return.
HMRC has published newsletter 139. The newsletter includes a reminder that pension schemes need to be migrated onto HMRC's new Managing Pension Schemes Service. For most schemes, this migration process must be performed by the trustees of the pension scheme and, therefore, you will need to take action. Do not assume that this is something your scheme administrators are able to do on your behalf. If you have not logged into the Pension Schemes Online service recently, the first step will be to make sure that your login still works (or to get set up with a new login). There will then be steps that you will need to follow to effect the migration. It does not happen automatically. HMRC's newsletter 139 contains a link to further information.
HMRC has updated pages of its pensions tax manual to reflect the increase in the normal minimum pension age from 55 to 57 from 6 April 2028. The pages also set out the criteria for retaining a protected pension age of less than 57.
In our latest #AttentionPensions video, partner Kirsty McLean highlights the key areas of focus for trustees in the lead-up to compulsory connection with pensions dashboards. Our Keys to Compliance document is designed to help with your project planning. Speak to us if you would like any help with dashboards compliance.
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.