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

• Collective Defined Contribution (“CDC”) Regulations published
• GMP Conversion Bill has Government support
• Further consultation and draft regulations following McCloud
• PASA publishes Data Matching Convention (“DMC”) Guidance
• PPF publishes Purple Book 2021
• TPR publishes blog “Uncertainty remains, but trustees hold key to protecting savers”

Collective Defined Contribution (“CDC”) Regulations published

The Pension Schemes Act 2021 (Commencement No. 5) Regulations 2021 were made on 8 December 2021, and bring into force certain provisions of the PSA21 that relate to CDC schemes on 13 December 2021.  These include provisions:

• requiring TPR to issue a code of practice relating to the authorisation process for CDC schemes
• permitting the Secretary of State to make regulations which limit or prohibit particular types of administration charge in relation to CDC schemes.

GMP Conversion Bill has Government support

The Private Members’ Bill, which aims to clarify certain aspects of the statutory process for the conversion of GMPs, has now had its second reading in the House of Commons, where Guy Opperman, the Pensions Minister, stated that the Government supports the Bill.

Further consultation and draft regulations following McCloud

The Government is consulting on draft NHS Pension Schemes (Amendment) Regulations 2022, which aim to amend current legislation to implement the first part of the remedy in the judgment in McCloud.  The consultation closes on 20 January 2022.  As with other public sector schemes (see 7 Days), a further set of draft regulations will be consulted on separately in 2022, dealing with the remainder of the remedy.

PASA publishes Data Matching Convention (“DMC”) Guidance

On 7 December 2021, PASA published its DMC Guidance.  This initial guidance is intended to help schemes in choosing how they wish to compare “find requests” from dashboard users against the member records.  PASA explains that trustees’ choice of matching will depend on the accuracy of the personal data they hold on their scheme, across all of their deferred and active member records. Schemes should make these choices ahead of the upcoming pensions dashboards legislation.

In the associated press release, PASA confirms that the DWP is planning to consult shortly on draft dashboards regulations, and PDP is commencing its alpha build and test phase, with supplemental PASA Guidance to follow in 2022.

PPF publishes Purple Book 2021

The PPF published The Purple Book on 7 December 2021, alongside a blog.  The book gives a comprehensive picture of the risks faced by DB pension schemes in the UK, reviewing 99.9% of the schemes eligible for compensation from the PPF.  The data covers the period from 1 April 2020 to 31 March 2021. The latest edition found that:

• the universe of DB schemes continues to shrink. There are now 5,220 eligible schemes, down from 5,327 as at March 2020
• on an estimated full buy-out basis, the net funding position of DB schemes improved to a deficit of £613.3bn from a deficit £668.5bn the year before, and the funding ratio improved from 71.8 to 73.7 per cent.

TPR publishes blog “Uncertainty remains, but trustees hold key to protecting savers”

On 8 December 2021, TPR published a blog reminding trustees that they are the “first line of defence” for savers.  TPR encourages trustees to have “strong, open relationships” with employers to ensure they are “appraised of the health” of their employer, and reminds them how they can prepare for emerging risk in relation to a weakening employer covenant.

The blog also addresses TPR’s “broad package” of new powers under PSA21 (see Alert). TPR notes that “employers who are doing the right thing should not be worried about these new powers, which give us more options to punish wrong-doers. We hope their existence will be a deterrent in themselves”. TPR states that it is also exploring how its new information gathering powers “may be used for [its] existing cases”.