Pensions Weekly Update – 10 August 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.

You may have read in previous weekly updates that regulations come into force on 1 October 2022, which incorporate into pensions legislation relevant aspects of the Competition and Markets Authority (CMA) order in relation to the investment consultancy and fiduciary management markets. Our weekly update of 8 June 2022 provides further information. The main point to note from a practical perspective is that The Pensions Regulator (TPR) will take over from the CMA to ensure compliance with the order by pension scheme trustees. Following publication of the regulations, TPR has now updated its guidance on both the tender process for fiduciary management services and setting objectives for investments consultants. We anticipate that rolling the annual CMA compliance statement into the scheme return will be widely appreciated as it effectively crosses one item off the trustee action list.
In a busy week for TPR, it has also published its strategy to combat pension scams, with the emphasis on: educating savers on the risk of scams; encouraging higher standards that prevent practices leading to saver harms; and fighting fraud through the prevention, disruption and punishment of criminals. The strategy sets out the actions that TPR intends to take over the next three years to help achieve these objectives. It is clear from the strategy that TPR expects the pensions industry to do more to prevent, combat and report pension scam activity. For example, in year one, TPR aims to set expectations that schemes include a pension scam warning in every annual benefit statement. TPR also advocates compliance with the "Pledge to Combat Pension Scams" and the Pension Scams Industry Group (PSIG) Code principles. TPR plans to consider whether the Pledge or PSIG Code compliance could be a mandatory element of the scheme oversight and customer service strand of future value for member assessments for DC trust-based schemes. This regulatory intervention seems timely given the current cost of living crisis. There is widespread fear that those struggling to make ends meet may be more vulnerable to pension liberation fraud.
Meanwhile, The Pensions Ombudsman (TPO) has published its Corporate Plan 2022–2025, which outlines its strategic goals and priorities over the next three years. TPO’s main priorities are:

To reduce the customer waiting times that have arisen due to an increased demand for TPO’s services
To evaluate the success of the Pensions Dishonesty Unit pilot (which holds wrongdoers responsible and seeks to ensure they repay scheme members).
To work closely with the pensions industry to raise standards in dispute resolution and enable schemes to resolve disputes without the need for TPO’s involvement.

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If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.