Pensions: Joint DB/DC trustee agenda update - for July 2022 meetings
23 June 2022
Welcome to our monthly update on current legal issues, designed to help you stay up to date with key developments between trustee meetings, and to support the legal update item on your next trustee agenda. We also have a separate DC-only briefing.
TCFD reporting requirements and SIP/implementation statement guidance NEW
Schemes in scope for TCFD reporting requirements (including £1bn+ schemes in the second wave of the rollout) will have to include ‘Paris alignment’ reporting from 1 October 2022 for scheme years ending after that date. The government has produced updated statutory guidance to reflect these new requirements.
The government has also updated its guidance on reporting in statements of investment principles (SIPs) and implementation statements, to provide greater clarity on stewardship, including voting and engagement. Compliance with statutory elements of the guidance is required for your next scheme year ending on or after 1 October 2022.
ACTION: Discuss the new requirements and guidance with your investment advisers.
TPR guidance: reporting pension scams NEW
The Pensions Regulator (TPR) has published a guide on reporting pension scams, including when to report, what information to provide and what will happen next. Read the guide.
ACTION: make sure your scheme has processes in place for reporting suspicions of scams in line with the new guide.
Regulations on investment consultancy (IC) and fiduciary management (FM) NEW
Regulations to replace the current regime on strategic objectives for IC providers and competitive tenders for FM services are expected to come into force on 1 October 2022. The new regulations largely replicate the existing requirements, but there are a few changes to be aware of: read more.
ACTION: Check whether your IC/FM arrangements are impacted by the new rules.
TPR annual funding statement
TPR’s latest annual funding statement has a focus on current market uncertainties. All DB schemes and sponsors should familiarise themselves with the content, and especially those with an effective valuation date between 22 September 2021 and 21 September 2022 (Tranche 17), or where funding and risk strategies are being reviewed in connection with wider scheme changes. Read the statement.
ACTION: Review the statement and consider whether any changes are required to your scheme’s funding strategy or processes.
PASA DB transfers guidance
The Pensions Administration Standards Association (PASA) has published good practice guidance on DB transfers. The recommendations in the guidance are voluntary, but PASA anticipates that the Pensions Ombudsman will reference it when reviewing complaints, as an example of what good industry practice looks like. Read the guidance.
ACTION: Discuss with your administrators whether their processes are in line with the new guidance.
GMP equalisation guidance
HMRC’s latest GMP equalisation (GMPE) newsletter includes guidance on tax issues around making top-up payments to correct previous transfers which did not account for GMPE; and GMP conversion. Read the newsletter.
PASA has published FAQs designed to provide guidance to administrators implementing GMPE. HMRC-approved guidance on tax treatment of interest on GMPE payments is also available. Read the FAQs and guidance on interest payments.
ACTION: Consider the guidance as part of any ongoing GMPE project.
Have your say
- The DWP has published a call for evidence on areas including whether investment pathways (offering a range of investment plans based on what a member intends to do with their pension pot) would be helpful in the occupational pensions context and whether ‘wake-up’ communications should be simplified and provided earlier and more regularly. The deadline for feedback is 25 July 2022: read more.
Watch this space
- The government has consulted on changes to the notifiable events regime. There is currently no revised date for the delayed regulations, but the industry expectation is that this may be October 2022: read more.
- TPR has consulted on its proposed single code of practice: watch our webinar on the proposals and read TPR’s interim response. On timing, TPR’s recent corporate plan states only that the code will be published ‘during 2022’.
- Consultation on new DB funding regulations is expected shortly. TPR has announced that, subject to the timing of the regulations consultation, it is planning to launch its second consultation on the new DB funding code in autumn 2022, with the new code becoming operational from September 2023: read more.
- A revised code on transfers, and other materials from the Pension Scams Industry Group, are expected imminently.
- TPR will be launching a joint consultation with the Financial Conduct Authority (FCA) and DWP on a Value for Money Framework by the end of the year.
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