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

TPR publishes consultation on DB funding code

On 16 December 2022, TPR published a package of scheme funding documents, including a consultation on its draft Code of Practice (“the draft Code”), a consultation on its “Fast Track” and “twin track” regulatory approach, and a response to its first funding code consultation. This follows the DWP’s consultation on draft funding and investment regulations earlier this year (see our Alert).

The draft Code is intended to replace the current code, introduced in 2014, with effect from October 2023, when the funding and investment regulations are expected to come into force. Unusually, the draft Code is based on the draft regulations in the form consulted on by the DWP, as the regulations have not yet been finalised. TPR “will continue to engage closely with the DWP and industry after this consultation… to take account of changes made by the DWP in response to their consultation”.

The consultation will run until 24 March 2023. See our Alert for further details.

PPF publishes levy rules for 2023/24

The PPF’s consultation setting out its plans for the 2023/24 levy rules closed in November (see 7 Days). It published its policy statement with final levy rules on 13 December 2022.

The policy statement confirms that the total amount of PPF levy charged will reduce significantly, from £390m in the 2022/23 levy year to around £200m for 2023/24.

FCA publishes feedback statement on compensation framework

On 14 December 2022, the FCA published a feedback statement in response to its December 2021 discussion paper aimed at “maintaining a compensation framework that provides appropriate protection for consumers, funded in a fair and sustainable way”. The FCA does not consider that material changes are needed, but it does propose some further steps to help ensure the framework “remains proportionate and provides an appropriate degree of protection for consumers with costs fairly distributed”. The steps, expected to complete largely over the 2023/24 financial year, include reviewing compensation limits (including for pension claims).

Developments in implementing the McCloud remedy

In the latest steps towards implementing the remedy to rectify age discrimination in affected public service pension schemes (see our McCloud case summary), the Ministry of Justice has published a consultation on draft regulations to offer judges a choice of pension scheme membership for the relevant period and to address certain technical aspects of the remedy. The consultation runs from 16 December 2022 to 10 February 2023.

This consultation follows Treasury Directions issued by HMT specifying how certain powers to implement the remedy must be exercised and how compensation may be paid, and a technical consultation by HMRC on certain tax aspects of the remedy.

FRC consults on its three-year plan and budget

The FRC published its draft plan, setting out its priorities for 2023 to 2026, and the resources it will need to achieve them, on 16 December 2022. The plan takes into account that the FRC expects the creation of statutory powers and functions for the new Audit, Reporting and Governance Authority (see 7 Days) to occur in 2024.

Having set an increased funding requirement for 2023/24 compared to the previous year, the FRC proposes to increase its levy. The FRC will confirm the levy rate to be applied to DB and DC schemes with 5,000 members or more “after receiving data on scheme membership provided by [TPR]”. The consultation closes on 27 January 2023.

FOS consults on plan and budget for 2023/24

On 16 December 2022, the FOS published a consultation on its strategic plans and budget for 2023/24. In relation to pensions and investment complaints the FOS is monitoring, it expects to see increases in complaints about the suitability of advice to transfer pensions, surrender and execution delays, performance and portfolio management complaints, and an increase in scams involving investments and cryptocurrencies, among other trends. The consultation closes on 31 January 2023.

PDP publishes blog reviewing work during 2022

On 15 December 2022, the PDP published a blog on its pensions dashboards work during 2022, confirming that the technology build for the central digital architecture “has now been delivered” and the PDP is working through final assurances to ensure it is ready for the next phase in 2023.

Best wishes for the festive season and 2023

This is our last 7 Days of 2022. The first edition of the new year will be published on Tuesday 3 January 2023.

With best wishes for 2023 from all at Sackers.