Pensions UK: What's new this week - 15 March 2021

• TPR consults on draft guidance on new criminal offences
• PLSA stewardship and voting guidelines
• Finance (No. 2) Bill
• Latest GMP revaluation order
• TPR publishes new corporate strategy

TPR consults on draft guidance on new criminal offences

The Pensions Regulator (TPR) is consulting on a draft policy on how it plans to use its powers to investigate and prosecute two new criminal offences under the Pension Schemes Act 2021: avoidance of employer debt; and conduct risking accrued scheme benefits.

The draft policy is relatively short and although it provides some comfort about the types of conduct that TPR is planning to pursue, it leaves a number of important questions and concerns unanswered.

Read our briefing.

The consultation closes on 22 April 2021. TPR is seeking general feedback on its draft policy, as well as answers to specific questions, so this is a good opportunity to raise concerns or ask for further guidance. If you have any questions about the draft policy, or comments that you would like us to include in our response (on an anonymous basis), please speak to your usual Allen & Overy adviser.

View the consultation documents.

PLSA stewardship and voting guidelines

The Pensions and Lifetime Savings Association has published its 2021 stewardship guide and voting guidelines. The guidelines set out voting recommendations for pension schemes and/or their asset managers, including in relation to remuneration, and climate change and sustainability. Trustees are now required to explain their voting behaviour, including significant votes cast, in their annual report and a publicly available implementation statement. Read our briefing.

This year the PLSA’s guidelines state that investors should consider voting against the Report and Accounts/Remuneration Policy/re-election of the responsible director or Chair if there has been inadequate disclosure or action taken in relation to climate change or sustainability – the guidelines list specific issues to be considered by resolution type. For example, investors should consider voting against re-election of the responsible director or Chair if:

• Large business: it is not already moving towards disclosures consistent with mandatory TCFD obligations (or other relevant framework).
• Smaller business: it is not taking action at a pace proportional to the resources available and the government’s TCFD roadmap.

Read the guidelines.

Finance (No. 2) Bill

The Finance (No. 2) Bill has been introduced to Parliament, covering matters including:

• the ‘freezing’ of the standard lifetime allowance at £1,073,100 for tax years 2021/22 to 2025/26; and
• amending the Finance Act 2004 to reflect the introduction of collective money purchase schemes.

Some of the proposed changes have already been given temporary legal effect, using Budget resolutions: read the resolutions. This includes the change to the standard lifetime allowance for the tax year 2021/22.

Read the Bill.

Latest GMP revaluation order

Guaranteed minimum pension rights that are not yet in payment must be revalued in line with statutory requirements. The latest section 148 order sets out revaluation rates for the tax years 1978/79 to 2020/21 to be applied to a deferred member’s earnings factors for each year in which the member accrued GMP rights. This order will also be relevant to schemes using fixed rate revaluation, as section 148 orders govern revaluation for periods before fixed rate revaluation is triggered.

Read the order.

TPR publishes new corporate strategy

TPR has published its new 15-year corporate strategy, following a consultation last year. The strategy sets out how TPR’s focus will be on savers (not schemes) and will shift, over time, from DB to DC saving; it also notes TPR’s key areas of focus for members from the Baby Boomer, Generation X, and Millennial generations. Over this period, TPR’s five strategic goals are: savers’ money is secure; savers get good value for money; decisions made on behalf of savers are in their best interests; the market innovates to meet savers’ needs; and TPR is a bold and effective regulator.

As well as the new corporate strategy, TPR has also published a response to the consultation, and a blog post. The consultation response notes that TPR will shortly publish a discussion paper on value for money issues.

Read the corporate strategy.

Read the consultation response and blog post.