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

Government announces pensions measures among financial services reforms

On 9 December 2022, the Government announced a set of reforms intended to “drive growth and competitiveness in the financial services sector”. The pensions-related reforms include the following:

the Government is “committed to accelerating the pace of consolidation”, and the DWP is expected to “lead the way” by consulting on a new value for money framework alongside the FCA and TPR in the New Year. The framework is intended to set required metrics and standards in key areas such as investment performance, cost and charges and quality of service
in early 2023, the Government is planning to consult on new guidance for the LGPS on asset pooling, and on requiring LGPS funds to ensure they are considering investment opportunities in illiquid assets, as part of a diversified investment strategy, and
regulations to remove well-designed performance fees from the pensions regulatory charge cap (see our Alert for more details) should be laid before Parliament “early in the New Year”.

DWP publishes final guidance on deferred connection to dashboards

Coinciding with the Pensions Dashboards Regulations 2022 coming into force, the DWP published final guidance on deferred connection on 12 December 2022. A scheme can apply to defer its staging date for up to 12 months if a scheme is in the process of changing administrator, provided certain conditions are met. Trustees should consider this guidance if they are applying for a deferral.

TPR and the FCA publish update to joint regulatory strategy

On 7 December 2022, TPR and the FCA published a high-level update to their 2018 joint regulatory strategy, with an accompanying blog by TPR. The update outlines how TPR and the FCA are achieving their joint regulatory objectives since the strategy’s publication and how they will continue to do so in the future, across eight joint workstreams. The joint areas of focus – access and participation, funding and investments, governance and administration, and consumer understanding and decision-making – “remain valid”. Future developments include:

during 2023, working alongside the FRC and the DWP to assess the stewardship regulatory framework, whether the Stewardship Code is creating a market for effective stewardship, and the need for any further regulation, and
working with the DWP to consider how to further support savers, including through the FCA’s new consumer duty, tying in with wider FCA work on advice and guidance. TPR and the FCA are also “exploring options” to give “greater confidence about the advice/guidance boundary”.

TPR updates scheme return for DB and hybrid schemes

TPR has published information about the 2023 scheme return process, including example scheme returns.

The scheme return has been updated this year to include new asset breakdown questions, with information requirements based on the scheme’s size. Schemes with less than £30m in total liabilities will need to provide “simplified” information. Schemes with over £30m in total liabilities will need to provide more detailed information about their bond and equities holdings, and schemes with over £1.5bn in total liabilities will also need to provide information on risk factor stresses.

2023 scheme returns must be submitted to TPR by 31 March 2023.

TPR publishes blog on member outcomes

On 9 December 2022, TPR published a blog focussing on member outcomes in DC schemes. Discussing recent regulatory changes such as the introduction of detailed value for member requirements for small DC schemes (see our October 2021 DC Briefing), which “should drive significant change”, TPR emphasises that all trustees “need to consider whether their governance structures are fit for the future investment environment” or whether it would be appropriate to consolidate to achieve better member outcomes.

Anthony Arter to stay on as part-time Deputy Pensions Ombudsman

On 9 December 2022, TPO announced that Anthony Arter will remain at TPO as Deputy Pensions Ombudsman for up to 12 months after his term as TPO ends on 15 January 2023. Anthony will remain to complete the cases for which he has held Pensions Dishonesty Unit oral hearings, deal with any conflicts which Dominic Harris may have as new TPO, and ensure a smooth transition.