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

• FCA consults on the new value for money framework
• HMRC publishes Pension Schemes Newsletter 161
• PASA publishes guidance on preparing for the change to NMPA
• Chancellor calls on pension funds to “learn lessons from the Canadian model”

FCA consults on the new value for money framework

The FCA published a consultation on detailed rules and guidance for a new value for money (“VFM”) framework on 8 August 2024. This builds on its previous work with the DWP and TPR towards a new market-wide VFM framework for DC schemes, including their joint 2023 consultation.

The consultation sets out the proposed rules and guidance that will apply to default arrangements of FCA-regulated workplace DC schemes, but with metrics and concepts intended to be suitable for application across the whole DC pensions space. This includes a new traffic light ratings system. Possible future developments are also explored, such as incorporating some VFM information into pensions dashboards.

TPR is urging trustees to respond to the “technical detail of the consultation, with a view to ensuring the final framework can be applied effectively to trust-based schemes”. Similarly, the FCA plans to continue to develop its approach to implementation in light of VFM changes to be included in the Pension Schemes Bill.

The consultation closes on 17 October 2024. See our Alert for further details.

HMRC publishes Pension Schemes Newsletter 161

On 7 August 2024, HMRC published its latest pension schemes newsletter, which includes an update on the planned regulations to address “technical inaccuracies” in the legislation that abolished the LTA (see our Alert for details of some of the issues identified).

The Government is intending to introduce the necessary regulations “as soon as the parliamentary timetable permits after the summer recess”. Prior to that, HMRC is consulting with industry on the draft legislation until 14 August 2024.

PASA publishes guidance on preparing for the change to NMPA

On 12 August 2024, PASA published new guidance on preparing for the increase to NMPA from age 55 to age 57 from 6 April 2028. The guidance aims to support trustees and administrators in preparing for the change, including identifying members with a protected pension age and dealing with transferred-in protected pension ages.

Chancellor calls on pension funds to “learn lessons from the Canadian model”

A press release published on 7 August 2024 announced plans by the Chancellor, Rachel Reeves, to encourage the UK to “learn lessons from the Canadian model” of pension schemes, including how consolidating into larger funds can “help drive investment in productive assets”. The Chancellor’s first Mansion House speech, which will take place after the Parliamentary summer recess, is expected to focus on the financial service sector’s role in “delivering more investment and financing growth”.

In addition, on 12 August 2024, the PLSA published a report with recommendations to “create the necessary investment conditions for pension schemes to allocate a greater portion of retirement savings to UK growth assets”, with examples of recommended actions by sector such as energy and transport.