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 published its annual funding statement 2023, which is relevant for employers and trustees of defined benefit (DB) pension schemes with a valuation date falling between 22 September 2022 and 21 September 2023. It is also relevant for other schemes that are undergoing funding and risk reviews following a change in circumstances. TPR notes that many schemes may have seen a change in their funding position (for better or for worse) and trustees should react accordingly. If a scheme's funding position has strengthened, trustees should consider locking in gains where appropriate. If a scheme's funding position has deteriorated, trustees should reset funding and investment strategies to reach their long-term targets and should review their operational governance processes to ensure future resilience. Whether funding levels have improved or deteriorated, trustees should continue to be mindful of the importance of monitoring the employer covenant and should ensure appropriate information sharing arrangements are in place. We can help with this, if required. The annual funding statement also covers mortality assumptions and the impact of inflation rates on valuations. TPR says that it expects the DB funding code and the funding and investment regulations to come into force at the same time in April 2024.
The government has announced the re-establishment of the Asset Management Taskforce with an increase in its membership, along with the establishment of a new Technology Working Group. The taskforce was previously instrumental in promoting the progress of stewardship. The new technology group will examine the impact of new technology on the asset management sector.
HMRC has published pension schemes newsletter 149. This includes further information in relation to the lifetime allowance and includes an update on a change of approach regarding tax charges on DB lump sum death benefits and uncrystallised funds lump sum death benefits. HMRC has taken on board feedback received from the industry and has refined the process, pending development of a longer-term position for the full abolition of the lifetime allowance in 2024. HMRC reminds trustees that they need to migrate pension schemes from the Pension Schemes Online service to the new Managing Pension Schemes service. Ideally, this should be achieved before 5 April 2024, otherwise, pension scheme return filing deadlines may be impacted.
If you would like specific advice on any of these issues or on anything else, please contact a member of our Pensions team.