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

• Changes to scheme return for DB and hybrid schemes
• TPR issues new call to action on pension scams
• Bank of England finds “improved resilience” of pension funds
• TPR moves towards a different style of regulation
• Court of Appeal finds creditor could not require judgment debtor to draw down pension

Changes to scheme return for DB and hybrid schemes

TPR has made some changes to the DB and hybrid scheme return for 2024-25. These include:

• additional questions regarding the quality of data on scheme members
• requiring more recent information about scheme membership figures
• new questions about the performance of investment consultancy providers against objectives that have been set, and whether those objectives have been reviewed.

Scheme returns must be submitted by 31 March 2025.

TPR issues new call to action on pension scams

On 29 November 2024, TPR issued a “fresh call” for the industry to take action to protect members against pension scams. This follows an EastEnders storyline on which TPR provided behind the scenes guidance to help ensure viewers were given a “powerful insight into the duplicitous tactics fraudsters use”.

The industry is encouraged to report scams and suspicions of scams to Action Fraud.

TPO is also encouraging individuals to report suspected scams, in a press release about another recent determination involving pension liberation. Following an investigation by the Pensions Dishonesty Unit, the DPO found that scheme funds were invested, in breach of trustee investment duties, towards a pension liberation arrangement and by trustees in a position of conflicting interests, and directed that over £5.2m was to be repaid by the trustees into the affected schemes.

Bank of England finds “improved resilience” of pension funds

In a press release published on 29 November 2024, TPR commented on an exploratory scenario ran by the Bank of England which demonstrated that pension funds have “significantly improved” their resilience with respect to LDI over the past two years, and are now “more resilient to extreme market movements”.

TPR’s market engagement suggests that schemes are using its guidance issued in April 2023 to strengthen their ongoing resilience. It will “continue to guard against systemic risks” by understanding how schemes respond to stressed market conditions, and exploring improvements to its data collection.

TPR moves towards a different style of regulation

On 27 November 2024, following a speech by Nausicaa Delfas, TPR’s Chief Executive, TPR announced some intended changes to its style of regulation in response to the Mansion House reforms and a “rapid acceleration” in the scale of workplace pension schemes. TPR’s modelling suggests that in 10 years, the master trust market will contain schemes of “systemically important size”, with seven schemes each expected to have more than £50 billion assets under management.

TPR intends to develop a more “prudential” style of regulation to address risks at both individual scheme level and those risks which impact the wider financial ecosystem. To do this, it will focus on scheme investments, data quality and trusteeship. A new “regulatory toolkit” will include:

• a new approach to master trust supervision with tiers of engagement depending on the risks schemes present
• investing in digital, data and technology
• growing a team of “innovation professionals” and putting in place a “pensions market innovation hub” to provide guidance to enable safe new product development.

Court of Appeal finds creditor could not require judgment debtor to draw down pension

In a recent case, the Court of Appeal has considered the correct interpretation of section 91 of the Pensions Act 1995 which restricts the surrender, commutation and assignment of entitlements or future rights to a pension under an occupational pension scheme (subject to certain exceptions). The Court found this section prohibits the making of a court order “the effect of which” would be to restrain the member from receiving their pension “for their own benefit”. See our case summary for further details.