Pensions: what's new this week - 23 October 2023
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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: TPR blog post on pensions dashboards preparation; DWP Taskforce consultation on social factors guidance; and PLSA guides: buy-ins/outs and CDI.
TPR blog post on pensions dashboards preparation
The Pensions Regulator (TPR) has published a blog post encouraging schemes to prepare for pensions dashboards and highlighting TPR’s dashboards preparation checklist as a tool to help. The checklist sets out a list of actions for schemes to take and links to relevant guidance.
The post does not give an update on when schemes’ connection staging deadlines will be published (the deadlines will now be set out in guidance rather than legislation), saying only that this will happen ‘in due course’, but TPR encourages schemes not to wait until target connection dates are known before starting preparations.
DWP Taskforce consultation on social factors guidance
The DWP’s Taskforce on Social Factors is consulting on draft guidance for pension scheme trustees aimed at enabling them to identify and monitor social risks and opportunities and embed these factors within investment decisions and stewardship policies. The guidance discusses:
- why material social factors (such as workforce conditions, remuneration practices, bribery, health and safety, and modern slavery) are important from an investment perspective alongside other financially material environmental and governance factors, and how taking them into consideration aligns with pension trustees’ fiduciary duties;
- what data trustees can use to measure social factors, with guidance on how schemes can assess social risks in the absence of modelling in the industry;
- an example framework for including social considerations in trustee policies and practices, providing examples of baseline, good and best practices;
- guidance on how schemes should address modern slavery in particular; and
- recommended actions the Taskforce believes should be taken by trustees, advisers, investment managers, regulators, government and other parties to improve social factor integration across the industry. For trustees, these actions include improving understanding of how their investment consultants approach social factors and setting them objectives relating to these factors; considering social factors when appointing and working with asset managers; and considering their own practices in relation to social considerations.
PLSA guides: buy-ins/outs and CDI
The Pensions and Lifetime Savings Association (PLSA) has published two ‘made simple’ guides: one covering buy-ins and buy-outs, the other covering cashflow driven investment (CDI).
The buy-ins and buy-outs guide includes seven high level steps to preparing for and implementing a buy-in/buy-out and more detailed guidance on preparing data, improving pension liabilities calculations, investment strategy, choosing an insurer, due diligence, member communications and implementation.
The CDI guide explains how CDI works; how CDI can be combined with liability driven investment (LDI); which assets are appropriate for a CDI approach; how CDI is monitored; and which schemes CDI may be appropriate for.