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

• Mansion House 2024: Government proposes pensions “megafunds”
• FCA update on the advice guidance boundary review
• TPR’s DB funding code comes into force
• TPR publishes compliance and enforcement policy for CDC schemes
• New regulations to fix issues in tax legislation come into force

Mansion House 2024: Government proposes pensions “megafunds”

The Chancellor, Rachel Reeves, delivered her first Mansion House speech on 14 November 2024. Following the pensions reforms announced by the former Chancellor in 2023, this year’s speech confirmed plans to “go further” and create pension “megafunds” to “power growth in our economy”.

Following the speech, the Government published an interim report on its pensions investment review. As part of the outcome of the review, two key measures are proposed which are designed to accelerate and help enable scale and consolidation in the DC market:

• introducing minimum size requirements for DC default arrangements in multi-employer DC schemes used for automatic enrolment, as well as limits on the number of default arrangements in these schemes, and
• enabling the bulk transfer of assets from contract-based schemes without individual savers’ consent.

A consultation is being held on these proposals, in addition to a consultation on a package of reforms to the structure, investments and governance of the LGPS.

See our Alert for more detail.

FCA update on the advice guidance boundary review

The FCA published an update on its advice guidance boundary review on 15 November 2024. The review looked at proposals to improve the way financial advice and support are delivered to consumers, including considering the support that can be provided by trust-based schemes.

The FCA will focus first on pensions, with further consultations on:

• high-level proposals for targeted support for pension savers, expected in December 2024, and
• rules for better support for consumers in retail investments and pensions, planned for the first half of 2025.

In the meantime, a joint statement from the FCA, TPR and the ICO is intended to give trustees and pension providers some clarity on communications they can make to support members’ decision-making, in line with data protection laws, the FCA’s consumer duty and TPR’s expectations. It clarifies that trustees and providers can provide “neutral, factual information” to members and sets out examples of communications that are unlikely to constitute prohibited direct marketing.

TPR’s DB funding code comes into force

TPR’s new DB funding code came into force on 12 November 2024. The code sets out TPR’s guidance and expectations on how schemes should comply with the funding and investment strategy requirements (see our Alert for more details).

TPR publishes compliance and enforcement policy for CDC schemes

On 13 November 2024, TPR published its compliance and enforcement policy for CDC schemes, setting out its regulatory approach and how it will supervise such schemes. See our new Hot topic for an overview of CDC schemes.

New regulations to fix issues in tax legislation come into force

Two new sets of regulations to address issues in the legislation to remove the LTA came into force today, 18 November 2024. Subject to some specific transitional provisions, the changes made by the regulations apply retrospectively from 6 April 2024. See our Alert for details of the changes.