7 days

7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.

In this 7 Days

• The Occupational Pension Schemes (Investment and Disclosure) (Amendment) Regulations 2019
• CMA: Investment consultants market investigation – Order published
• ESG and responsible investment
• HMRC – revised guidance and new forms
• PASA publishes cyber security guidance for pension schemes
• PPI – Briefing Note 114 – The gender pensions gap – can it be closed?
• Revised code on combating pension scams

The Occupational Pension Schemes (Investment and Disclosure) (Amendment) Regulations 2019

On 6 June 2019, the Occupational Pension Schemes (Investment and Disclosure) (Amendment) Regulations 2019 were laid before Parliament, together with an explanatory memorandum.

These regulations, which generally come into force on 30 September 2019, are intended to implement the aspects of Shareholder Rights Directive which relate to workplace pension scheme stewardship and governance.

EU Member States were obliged to transpose the Shareholders’ Rights Directive which, broadly, aims to encourage long-term shareholder engagement, into national law by 10 June 2019.

For further details, please see our forthcoming Alert.

CMA: Investment consultants market investigation – Order published

On 10 June 2019, the CMA published the Investment Consultancy and Fiduciary Management Market Investigation Order 2019 (“the Order”).

The CMA published the final report in its Investment Consultants Market Investigation in December 2018. This had set out the CMA’s findings that there are features of the markets for investment consultancy and fiduciary management services which adversely affect competition in connection with the supply and acquisition of those services to and by pension schemes.

The CMA decided on a package of remedies, to be implemented by order, to remedy, mitigate or prevent the adverse effects on competition that it found and their potential detrimental effect on customers. The Order now gives effect to these remedies.

Among other things, the Order requires:

• pension scheme trustees who wish to delegate investment decisions for 20% or more of their scheme assets to run a competitive tender when first purchasing fiduciary management services. (The CMA’s investigation found that many trustees used only the fiduciary management service offered by their investment consultant, without exploring alternatives)
• pension scheme trustees who have already appointed a fiduciary manager for 20% or more of their scheme assets without a tender to put the service out to tender within five years of the appointment
• fiduciary management firms to provide potential new customers with more information on their fees and performance, so they can compare service providers with ease. They must also provide more information on their fees to their existing clients.

Trustees, fiduciary managers and investment consultants now have six months to ensure their practices are in line with the Order’s requirements. Those found not to be complying may be taken to court by the CMA.

ESG and responsible investment

On 3 June 2019, Guy Opperman, the Minister for Pensions and Financial Inclusion gave a speech addressing issues including the importance of ESG, and progress on the pensions dashboards.

Mr Opperman noted that the industry delivery group for the dashboards is expected to be up and running “by the end of the summer” and that one of its priorities will be working to agree data standards. In parallel, the industry is expected to start creating and testing consumer facing dashboards “to determine what works best for the individual”.

HMRC – revised guidance and new forms

On 4 June 2019, HMRC issued revised versions of its guidance on managing a registered pension scheme, the pension schemes online user guide and sending pension scheme reports. It has also published several updates to its forms for use in relation to pension schemes, including:

• APSS 252 – report of benefit crystallisation events
• APSS210 – request to pay a member’s AA charge
• APSS209 – request by scheme administrator for LTA certificate details.

PASA publishes cyber security guidance for pension schemes

On 6 June 2019, PASA announced the publication of its cyber security guidance for pension schemes. The guidance is intended to provide practical support for trustees in formulating a robust and effective review of how they safeguard their scheme from cyber security issues. It covers five main areas:

• risk assessment
• governance
• risk management
• controls
• incident management.

PPI – Briefing Note 114 – The gender pensions gap – can it be closed?

On 7 June 2019, the PPI published Briefing Note 114 – the gender pensions gap – can it be closed? It outlines the factors which contribute to the gap in pension savings between men and women and looks at how factors affecting the gap may change in the future. It also explores options for altering investment practices in order to better meet women’s needs, and policy options for mitigating the effects of the gap on women’s outcomes.

Revised code on combating pension scams

On 10 June 2019, the Pension Scams Industry Group (“PSIG”) issued version 2.1 of its Code of Good Practice in Combating Pension Scams. This revised version of the code comes into force on the same day and applies to all transfer requests processed on or after that date. Key changes from the previous version include references to or updates on:

• the Cold Calling ban
• the TPR / FCA ScamSmart campaign and TPR’s Threat Assessment
• the Money and Pensions Service (MAPS)
• TPO determinations and implications
• the rise of claims management firms
• the FCA’s Letter on “Managing the risks of DB to DC transfers”
• the FCA-TPR-TPAS joint protocol
• PSIG’s Scams Survey Pilot 2018
• the Revised Action Fraud reporting guidance
• additional case studies.