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 in force from 1 October 2022
• Bank of England makes temporary purchases in the gilt market
• PPF announces proposed reduction in PPF levy
• TPR publishes diversity and inclusion action plan, advice on mergers and acquisitions, and updated guidance
• WPC publishes final report on protecting pension savers
• HMT updates outcome of RPI reform consultation

Changes in force from 1 October 2022

Several changes came into effect on 1 October 2022, including in respect of:

• climate reporting
• statutory guidance for preparing SIPs and implementation statements, and
• the introduction of simpler annual benefit statements for DC schemes used for automatic enrolment (“AE”).

See our Alert for details. In relation to climate reporting, TPR has updated its guidance to reflect the duty to calculate and report on the new fourth “Paris alignment” metric.

Bank of England makes temporary purchases in the gilt market

On 28 September 2022, following a surge in gilt yields after the Government published the Growth Plan 2022, the Bank of England announced plans for temporary purchases of long-dated gilts to “restore orderly market conditions”. The purchases will take place until 14 October 2022 and will be unwound in a “smooth and orderly fashion once risks to market functioning are judged to have subsided”.

PPF announces proposed reduction in PPF levy

The PPF published its Long-Term Funding Strategy review and consultation on the 2023 to 2024 levy rules on 29 September 2022, announcing its proposal to reduce the total amount of PPF levy charged by nearly half, to £200 million, so that “[a]lmost all levy payers will be paying less levy next year”. The proposed reduction recognises the PPF’s current financial position and changes in risk as it moves towards a new “maturing” funding stage.

The consultation closes on 10 November 2022, with the final rules expected in December.

TPR publishes diversity and inclusion action plan, advice on mergers and acquisitions, and updated guidance

TPR has issued various publications, including:

• an action plan to improve diversity and inclusion across trustee boards. TPR’s actions include publishing guidance for trustees and employers on equality, diversity and inclusion by the end of the 2022 to 2023 financial year
• a blog discussing its expectations in relation to mergers and acquisitions involving UK companies which sponsor a DB pension scheme. Employers are expected to “immediately alert trustees about a proposed corporate transaction” and to provide trustees with direct access to bidders at the earliest opportunity. In addition, outgoing and incoming executive management teams should support trustees to “implement a robust funding plan, underpinned by cash and/or tangible security with proven sustainable value”, and
• updated guidance on value for DC members, to add a section on the flat fee threshold on active and deferred pots which came into force on 6 April 2022 (see 7 Days).

WPC publishes final report on protecting pension savers

On 30 September 2022, the WPC published the final report in its three-part inquiry on protecting pension savers, focusing on adequacy of retirement incomes and AE. The report concludes that, although AE has been successful in increasing pension participation, it is time to address the challenges which mean many people are unaware they are not saving enough for retirement. The WPC recommends that the Government set up a new office to address this issue. The Government’s response to the report is due by 30 November 2022.

HMT updates outcome of RPI reform consultation

No appeal has been sought against the High Court judgment rejecting the claim for judicial review against the decision to change the methods used to compile RPI, so the judgment is final. On 26 September 2022, HMT updated the outcome of the consultation regarding the reform to RPI methodology to reflect this.