Pensions Weekly Update – 16 August 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 Department for Work and Pensions has updated its guidance on how trustees or scheme managers can apply for deferred connection to pensions dashboards and how these applications will be considered. An application for deferral of up to 12 months can be made between 9 August 2023 and 8 August 2024. The circumstances in which deferral can be granted are very narrow and are set out in regulations. Trustees or managers would need to provide evidence that, before 9 August 2023, the scheme had embarked on a programme to transfer the pension scheme data to a new administrator, and/or had entered into a contract containing an obligation to retender the administration. The timetable for the administration transition would need to be reasonable and conflict with the dashboards connection deadline of 31 October 2026, and the evidence would also need to show that compliance would be disproportionately burdensome, or would put the personal data of members at risk. In other words, it is a high hurdle to jump over! The update to the guidance follows on from the abolition of staging dates, which we covered in a previous newsletter.
The Pensions Regulator (TPR) has published a blog on “supporting innovation in defined benefit (DB) superfunds to drive better saver outcomes”. TPR says that the way to improve outcomes is to have fewer, larger, better run schemes. The blog links to the results of an engagement survey that TPR ran in relation to superfunds, and also links to TPR’s updated superfunds guidance and TPR’s updated superfunds guidance for prospective ceding trustees and employers. TPR’s updated guidance includes an updated position on profit extraction, an increased discount rate, further clarification on aspects of the assessment process, and general clarification in light of (1) stakeholder feedback and (2) TPR’s experience in operating the regime. The updates follow on from the chancellor’s Mansion House speech, in which Jeremy Hunt confirmed that the government would proceed with legislation for a permanent DB superfund regulatory regime when parliamentary time allows. For more information on that and the other pensions topics covered in his speech, please see our recent publication.
The Pensions Administration Standards Association (PASA) has published new data guidance on benefit accuracy for DB schemes. Kristy Cotton, the Chair of the PASA data working group has commented that “This guidance has been prepared to support schemes in understanding key areas which will support benefit accuracy…” The guidance focuses on benefit specification, data specification, benefit audit, automation, and independent assurance and should assist trustees in making sure that members receive the benefits due to them.