Pensions Weekly Update – 29 November 2023

November 2023
Region: Europe

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.

  • We noted in last week's update that the background papers to the chancellor's autumn statement included government responses to consultations and calls for evidence that were issued as part of its Mansion House proposals, including the outcome of its call for evidence on options for defined benefit (DB) pension schemes. The Pension Protection Fund (PPF) has published a response welcoming the chancellor's announcement that the government is committed to establishing a public sector consolidator by 2026 and recognising that the PPF would be well placed to operate this as a separate function. The PPF says, "We believe a public sector consolidator can help deliver the government’s objectives – securing the best outcomes for members, preserving a strong and diversified gilt market and increasing investment in productive assets (i.e. investments which help support the wider British economy and businesses)."
  • The government has now published the autumn Finance Bill. Schedule 9 sets out pensions provisions relating to the abolition of the lifetime allowance and other pensions tax measures.
  • The Financial Conduct Authority (FCA) issued a statement confirming that it will consult on detailed rules for a new value for money framework for defined contribution (DC) workplace pension schemes in spring 2024. The FCA is working closely with The Pensions Regulator (TPR) and the Department for Work and Pensions (DWP) to design a framework that will focus on long-term value rather than cost and will achieve consistency across the DC market.
  • Nausicaa Delfas, chief executive of TPR, issued a blog highlighting and welcoming the pensions announcements in the chancellor’s autumn statement, saying “change is coming, and we must all grasp the opportunity in savers’ interests.” Meanwhile, Mike Birch, director of supervision at TPR, has issued a blog in relation to capital-backed journey plans. He reminds trustees that TPR's DB superfunds guidance is relevant when considering capital-backed journey plans and that TPR plans on publishing further guidance in the new year in relation to alternative arrangements in the DB market.
  • TPR has published a report that summarises the results from its public service pension scheme governance and administration survey 2022-23. The purpose of the survey was to track governance and administration practices among public service pension schemes, including their approach to risk management, annual benefit statements and breaches of the law. The survey also covered schemes’ awareness and perceptions of the pensions dashboards, and the actions taken by local government schemes in relation to climate-related risks and opportunities. This year, the survey also included new questions on data management plans, investment in data management and technology, TPR codes of practice and guidance, TPR’s new-look enforcement policy and pension board diversity. The survey was completed by 191 of 204 public service pension schemes, representing 99% of all memberships.
  • A draft pensions dashboards connection guide for the Local Government Pension Scheme has been published to help administering authorities with their implementation plans. The 69 pages of information highlight the extent of the work to be undertaken, based on a “guestimate staging date” of April to September 2025. It is expected that guidance confirming connection dates will be issued early in 2024.
  • In our weekly update of 2 August 2023,we highlighted the decision in ClientEarth v. Shell plc and Others, which was of interest because it considers the wider issue of climate change strategies of large corporates and has implications for stewardship considerations by pension trustees. ClientEarth’s main claim was that Shell’s directors had failed to manage material risks posed to the company by climate change. ClientEarth sought permission to bring an action against Shell and its directors. The court dismissed the application, mainly on the grounds that ClientEarth had not provided any expert evidence that the directors had acted in a way that no other directors would have acted. ClientEarth sought permission to appeal this decision and it has now been reported that permission to appeal has been refused by the courts.
  • Watch out for our winter-warmer Hot Topics in Pensions next week for a summary of our top 10 current issues for your trustee or corporate agenda.

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

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