Pensions Weekly Update

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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 government has published confirmation that regulations will be laid before Parliament in the autumn that will facilitate the creation of non-associated multi-employer collective defined contribution schemes. Subject to parliamentary approval, the government says that it intends to bring legislation and an updated code of practice from The Pensions Regulator (TPR) into force as soon as practicable.
The Work and Pensions Committee (WPC) has published the government's response to the WPC’s third report of session 2023-2024 on defined benefit (DB) pension schemes. The report and response cover a variety of topics, including indexation of pensions relating to pre-1997 accrual, Pension Protection Fund (PPF) compensation, trustee knowledge and understanding, good scheme governance, DB consolidation and use of scheme surplus. In particular, the response notes that the government intends to run a consultation later in the year on good scheme governance and how to better support trustees. This will seek views on whether current trustee accreditation arrangements are robust enough, what additional support might be required for lay trustees and what protections are required to enhance the use of sole trustee models. TPR is developing a trustee register, through which it should be possible to publish anonymised aggregated data, such as the number of schemes that have an accredited trustee, the number of schemes that have a professional trustee, how many schemes have no accredited trustees and how many trustees have completed TPR’s trustee toolkit. The government says that it is still considering the possibility of the PPF acting as a consolidator for schemes that are not attractive to commercial consolidators.
TPR has published its market oversight report on market volatility. In it, TPR says that it has been stepping up its focus on investments, including by doubling its number of investment consultants and changing its structure to be more outcome and market focused. It says that this is in line with a shift in approach to a more prudential style of regulator. The report reflects insight and observations, as well as highlighting risks trustees will need to watch for and respond to. The report identifies five key areas that DB trustees should focus on and three key areas on which trustees of defined contribution (DC) schemes should focus. TPR says to trustees of both DB and DC schemes “you should have robust governance and operational resilience to adapt to changing market conditions. You should have clear communication lines with employers, advisers and other delegated authorities so that you are ready to take action when you need to.”. If in doubt, take advice!
With a pension schemes bill imminent, now might be the time for a bit of spring cleaning. In this blog post, trustees are reminded of the importance of continuing and finalising guaranteed minimum pension equalisation projects.

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