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Pensions: what's new this week - 20 November 2023

Welcome to your weekly update from the Allen & Overy Pensions team, covering all the latest legal and regulatory developments in the world of workplace pensions.

This week we cover the following topics: Call for evidence on pension scheme clearing exemption; TPR blog post on the challenges of DC decumulation.

Call for evidence on pension scheme clearing exemption

The government has published a call for evidence on the exemption of pension schemes from the obligation to clear certain derivatives contracts.

There is currently an exemption in place which excludes pension schemes from clearing requirements for over-the-counter derivatives under UK EMIR. This exemption lasts until 18 June 2025 (note: this relates to the UK clearing exemption only; the similar EU exemption for European pension scheme arrangements ended on 18 June 2023). The call for evidence is part of the government’s consideration of what the longer term approach should be. It seeks information on the extent to which and how the exemption is used; how schemes could meet the clearing obligations; the impact of the exemption during the ‘LDI crisis’ last autumn; and what the impact of expiry of the exemption might be. The call for evidence closes on 5 January 2024.

Read the call for evidence.

TPR blog post on the challenges of DC decumulation

The Pensions Regulator has published a blog post considering the complexity of accessing DC pension savings and outlining the vision that, over time, workplace pension schemes should become full-service providers, including decumulation options and post-retirement support. The blog post outlines a number of challenges that the Regulator and the industry face in achieving this; the Regulator intends to hold a series of virtual round tables in early 2024 and then to publish interim guidance to provide clarity on key issues.

Read the blog post.