Pensions Weekly Update – 12 July 2023

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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 chancellor has delivered his 2023 Mansion House speech, which includes some major proposals for the pensions industry, and introduces the government's response to several consultations that have been on the back burner for a while (such as defined benefit (DB) consolidation). The government says that the overall aim of the proposals is to secure more funding for UK initiatives while achieving better returns for pension scheme members. Nine of the UK's largest defined contribution (DC) pension providers have entered into a “compact” to meet the objective of allocating 5% of assets in their default funds to unlisted equities by 2030. The government hopes that this could unlock up to £50 billion of investment in high-growth companies by 2030 if all UK DC pension schemes follow suit. There are plans for all local government pension scheme (LGPS) funds to move assets into LGPS pooled funds by March 2025 with a direction that each pool should exceed £50 billion of assets. There will also be a consultation proposal that the LGPS should invest 10% of funds in private equity, which could unlock £25 billion by 2030. The following are some of the consultations/outcomes that were published on 11 July:
The Pensions Regulator (TPR) has published the results of its annual survey of trust-based occupational DC pension schemes, carried out between October and December 2022. The survey comprised quantitative interviews with individuals involved in managing 342 DC schemes of different sizes. The survey included questions around value for member (VFM) assessments. TPR noted that the likelihood of meeting VFM requirements increased in line with scheme size, but there were common failings around not researching or taking account of the characteristics, preferences and needs of members when assessing VFM.
TPR has launched its first trustee diversity and inclusion survey. Email invitations to take part in the survey, which will be open to all trustees of DC and DB pension schemes, will be sent out this month. Ninety-seven thousand trustees and public service pension scheme board members should receive an invitation. The closing date for submitting the online survey is 4 August 2023. TPR says that it expects to release the survey results before the end of 2023.