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

• GMP fixed rate revaluation to reduce to 3.25% per annum
• Finance (No. 2) Bill receives Royal Assent
• Multi-employer CDC schemes by end of 2022 / early 2023
• TPR publishes further guidance to help trustees with their new duties on climate-related governance and reporting
• PLSA publishes its Stewardship and Voting Guidelines for 2022

GMP fixed rate revaluation to reduce to 3.25% per annum

On 21 February 2022, regulations were laid before Parliament which provide for a new fixed rate of revaluation of GMP for early leavers.  The new fixed rate of 3.25% (down from 3.5%) applies to early leavers who leave pensionable service on or after 6 April 2022.

These regulations sit alongside the Government’s response to its autumn consultation on GMP fixed rate revaluation, which had proposed this reduction.

Finance (No. 2) Bill receives Royal Assent

The Finance (No. 2) Bill received Royal Assent on 24 February 2022. The Act, includes:

• legislation in respect of the change to NMPA from 55 to 57 (see 7 Days)
• a power to make regulations to address tax impacts that arise from the rectification of age discrimination in public service pension schemes, (following the McCloud judgment – see 7 Days)
• changes to time periods for notice and information requirements in relation to scheme pays.

Multi-employer CDC schemes by end of 2022 / early 2023

Guy Opperman, the Pensions Minister, has confirmed that the government “will move to multi-employer CDCs in the latter part of this year, going into next year, and will move at a sufficient pace” that it feels “is appropriate”.  This expansion will follow the introduction of CDC schemes for single and connected employers from 1 August this year (see 7 Days).

TPR publishes further guidance to help trustees with their new duties on climate-related governance and reporting

TPR published an Appendix to its climate change guidance on 23 February 2022, which is intended to illustrate the types of steps that trustees could consider taking in respect of their climate-related governance and reporting duties (see our Alert).

The example seeks to address specific requests for more information and examples received by TPR from the pensions industry during its consultation on its guidance on governance and reporting of climate-related risks and opportunities.

The example set out in the Appendix aims to help develop trustees’ understanding of how they might approach implementing the climate change reporting requirements at a practical level. However, TPR makes clear that it is not intended to be used as a checklist. It expects trustees to take appropriate advice and ensure that the approach they adopt to meeting the requirements of the climate change regulations is suitable for their scheme.

PLSA publishes its Stewardship and Voting Guidelines for 2022

The PLSA has published its Stewardship and Voting Guidelines for 2022, which are intended to provide a framework for pension schemes trustees, and investors generally, to ensure that companies are held to account on key issues in the forthcoming AGM season.  The guidelines cover:

• executive pay proposals, and how investors should vote if they are concerned
• the latest diversity standards that investors should take into consideration, and
• how companies should be reporting on climate risk and impact.

The guidelines also set out a framework for issues trustees should be considering in relation to board evaluation, audit and capital structure.