Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.
The Pensions Regulator (TPR) has announced that it has authorised the UK's first collective defined contribution (CDC) pension scheme. Currently, CDC schemes can be set up as a single employer scheme or for employers in the same group of companies. The Pension Schemes Act 2021 contains powers that would facilitate the establishment of CDC schemes for groups of employers who are not legally connected. We are awaiting the outcome of a consultation by the Department for Work and Pensions on extending CDC in this way.
Nicola Parish, executive director of Frontline Regulation at TPR, has published a blog setting out TPR’s expectations of trustees around environmental, social and governance (ESG) and climate change. The blog reminds trustees of the need for schemes with 100 or more members to publish their statement of investment principles (SIPs) and implementation statements and the requirement for larger schemes to publish reports in line with legislation reflecting the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). This blog follows on from TPR’s recent review of a selection of TCFD reports that were published during 2022 and is a prelude to TPR’s check of SIPs and implementation statements later this year. Trustees should ensure that their scheme’s SIP and implementation statement is publicly available and easily accessible online, or they risk fines of up to £5,000 for individual trustees or £50,000 for corporate trustees. We carried out a few spot-checks and found that while most schemes have uploaded their SIP, not all schemes have replaced their first implementation statement with the latest version. Trustees should take action now to make sure they do not inadvertently fall foul of the publication requirements.
“The time is ripe for a comprehensive review of pensions policy,” according to the Institute for Fiscal Studies, which, in partnership with abrdn Financial Fairness Trust, is starting a two-and-a-half-year project to assess the consequences of current pensions policy, the economic environment, and member risks and behaviours that impact standards of living in retirement. Recommendations will be made for reform to improve outcomes for future generations of pensioners.
The Pensions Administration Standards Association eAdmin Working Group has published new guidance designed to help trustees develop a member engagement strategy that meets modern needs.
If you would like specific advice on any of these issues or on anything else, please contact a member of our Pensions team.