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Pensions: Joint DB & DC trustee agenda update - July 2023

Welcome to our monthly update on current legal issues for trustees of DB and hybrid pension schemes, 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.

Dashboards update UPDATED

Regulations have been laid before Parliament setting 31 October 2026 as the new dashboards connection deadline for all schemes. A staging timeline for connection will be set out in guidance, rather than legislation (read more).

The Pensions Regulator (TPR) has updated its initial dashboards guidance to reflect the revised connection timetable (read more) and has published a blog post encouraging schemes to focus on data readiness, warning of possible industry capacity issues (read more).

PASA has published guidance on answering member queries (read more), data matching (read more) and providing value data to pensions dashboards (read more).

An Act preventing trustees from using pension scheme assets to indemnify themselves against penalties imposed by TPR for breach of the pensions dashboards requirements has received royal assent (read more). This is in line with existing provisions in relation to other penalties.

ACTION: Continue preparation for pensions dashboards, in line with the guidance. Seek advice on what liability protections are available to trustees and ways to mitigate risk.

TPR blog post on protecting DC savers from economic volatility NEW

TPR has published a blog post on supporting DC savers through the current economic environment (read more). It focuses on steps to take in relation to those closest to retirement with the least time to make up investment losses, including reviewing the default strategy and member communications. In relation to younger savers, TPR suggests schemes may want to provide additional supporting materials alongside annual benefit statements, to help savers understand the context of the figures being provided to them.

ACTION: read the blog post and consider whether any changes are needed to support your DC members.

TPR guidance on employers in distress

TPR has published refreshed guidance on dealing with employers in distress (read more). The updates to the guidance are not significant but the blog post announcing it encourages trustees to revisit the guidance and remain vigilant to current challenges to employer covenants.

ACTION: ensure your approach on employer covenant is in line with the guidance.

TPR annual funding statement UPDATED

TPR’s latest annual funding statement asks schemes to revisit funding strategies in light of recent funding changes (read more). The statement is relevant to all DB schemes but especially those with valuation dates between 22 September 2022 and 21 September 2023, as well as schemes undergoing significant changes or being asked to reduce contributions, change contingent asset arrangements or consider other uses of surplus. TPR has also published its analysis supporting the funding statement (read more).

ACTION: review the statement and consider whether any changes are required to your scheme’s funding strategy or processes.

TPR ED&I guidance

TPR has released guidance with actions for trustees and employers to improve equality, diversity and inclusion (ED&I) on scheme boards (read more).

ACTION: review the guidance and consider whether any actions are relevant to your scheme.

Climate/ESG reporting

TPR has published a review of annual climate reports, identifying common areas for improvement and of good practice (read more). It has also announced initiatives checking trustee compliance with environmental, social and governance (ESG) requirements (read more here and here).

ACTION: take TPR’s feedback into account when preparing your scheme’s climate reporting.

TPR guidance on leveraged LDI

TPR has published guidance for trustees on leveraged liability-driven investments (LDI) (read more). The guidance discusses collateral buffers and the steps that trustees should be taking in relation to LDI investment.

ACTION: consider your scheme’s LDI approach in line with the guidance.

Watch this space

  • TPR’s new corporate plan indicates that the launch of the new DB funding code and regulatory framework has been postponed to April 2024 (read more).
  • The government has consulted on changes to the notifiable events regime. There is currently no revised date for the delayed regulations (read more).
  • TPR has consulted on its proposed single code of practice (to be known as the General Code): watch our webinar on the proposals and read TPR’s interim response. Publication of the revised version of the code is expected soon.

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