Pensions Weekly Update – 3 April 2024

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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.

As expected, The Pensions Regulator’s (TPR) General Code of Practice came into force last week. Our Pensions team produced a special video, “The General Cake of Practice”, to mark the occasion and to offer compliance advice. We are working with many clients on their General Code project plans, so please speak to us if you need help. Our new one page guide offers our top tips. Look out for more in the coming weeks.
Following on from an order that came into force on 11 March 2024, which makes the operation of a pensions dashboard service a regulated activity, the Financial Conduct Authority (FCA) has now issued the further consultation paper CP24/4. This primarily consults on guidance designed to help firms understand the scope of this new regulated activity and when they will require permission to undertake it. Consultation closes on 8 May 2024.
Aside from the General Code, TPR has been busy over the last week. A blog on equality, diversity and inclusion (EDI) links to TPR’s gender pay gap report, and provides some commentary on the results of TPR’s survey on trustee diversity and inclusion, with some tips for trustees looking to improve their scheme’s EDI strategy.
TPR has also commented on a report by a committee of the Bank of England, which includes an update on the resilience of liability-driven investment funds following the volatility seen in September 2022. In the same press release, TPR links to a letter that it sent to the Bank of England’s governor in January setting out TPR’s progress and actions in relation to financial stability and achieving the bank’s recommendations.
TPR has published a pathway to net zero report. This covers a lot of ground and explains progress on reaching its 2030 operational net zero goal (against the emissions over which there is most control, such as gas, electricity, waste, business travel and water). It also sets out a 2050 net zero goal against all operational emissions.
HM Revenue and Customs (HMRC) has published newsletter 157. This covers a range of topics, including new security requirements before accessing the Managing Pension Schemes service (MPSS), and an update on the abolition of the lifetime allowance.

In relation to the MPSS, the newsletter notes that individual scheme administrators and scheme practitioners will be required to verify their identity before accessing the service. However, we note from our own experience that even if you are accessing the service using a corporate scheme administrator ID, the individual doing so on behalf of the corporate will be required to verify their identity before they can proceed any further.
In relation to the abolition of the lifetime allowance, the newsletter contains additional FAQs to provide more clarity. It notes that further information on the latest set of regulations implementing minor technical changes was provided to the LTA Working Group and that a summary can be provided by emailing policypensions@hmrc.gov.uk, putting “LTA Abolition: Further Regulations” in the subject heading.

The Work and Pensions Committee (WPC) published its third report on defined benefit pension schemes on 26 March 2024. In relation to the new DB funding code, the WPC is keen to ensure that open pension schemes will continue to thrive. With so many schemes now approaching surplus funding levels, the WPC considers it important that trustees and employers “are able to see running the scheme on as an attractive and meaningful alternative”. In relation to good governance, the WPC recommends that accreditation for professional trustees becomes mandatory and that the DWP explores ways to ensure that lay trustees have the time and resources to become accredited. It also recommends that every trustee board has at least one accredited member, lay or professional, and that there is a timetable for achieving this. The report also reflects on the fact that the Pension Protection Fund (PPF) has £12 billion in reserves, making one of TPR’s original statutory objectives, to protect the PPF, redundant. The WPC recommends that this objective is replaced by a new objective to protect future, as well as past, service benefits. This is a shift towards protecting the benefits of pension savers, rather than protecting the PPF. With regard to the PPF itself, the WPC proposes that the DWP should legislate to give the PPF more flexibility to reduce the PPF levy to zero with the ability to increase it in the future if required, and to improve PPF and Financial Assistance Scheme compensation levels.