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

• Consultation on draft pensions dashboard regulations published
• TPR consults on draft code of practice for CDC schemes
• TPR sets out its plans for 2022
• TPR’s latest DC Trust report shows a continued decrease in the number of DC schemes
• FSCS publishes research showing that one in five people have not checked the value of their pension pot
• Financial regulatory bodies agree to a Wider Implications Framework
• ICO launches “major listening exercise”
• TPO launches Pensions Dishonesty Unit

Consultation on draft pensions dashboard regulations published

DWP has published a consultation on draft regulations on the pensions dashboard, which closes on 13 March 2022. The regulations are intended to set out:

• requirements that a pensions dashboards service must meet in order to be a “qualifying pensions dashboard service”
• requirements on trustees or managers of relevant occupational pension schemes in cooperating with and connecting to MaPS (the body responsible for running the non-commercial pensions dashboard)
• TPR’s enforcement powers in relation to pensions schemes that do not comply with the new requirements.

For further detail, please see our forthcoming Alert.

TPR consults on draft code of practice for CDC schemes

On 25 January 2022, TPR published a consultation on a draft code of practice for the authorisation and supervision of CDC schemes, which closes on 22 March 2022.  The code:

• deals with how TPR will assess schemes against the authorisation criteria at the initial application stage and throughout ongoing supervision
• focuses on requirements that employers and trustees considering establishing a CDC scheme need to plan for now.

TPR will be revisiting the code to expand on its expectations for closure and wind-up in due course. It will also be producing accompanying guidance.

The regulations on CDC schemes are due to come into force on 1 August 2022 (see 7 Days).

TPR sets out its plans for 2022

TPR has published a blog setting out its aims for 2022.  Key messages from the blog include that TPR:

• is encouraging trustees to take a “decisive and common-sense approach” to the new transfer regulations. TPR also urges trustees to report suspected scams to the authorities, as well as joining its pledge to combat pension scams (See 7 Days)
• is working with its regulatory partners to establish a “common standard” on value for money
• wants to see schemes integrating climate change into their decision making and generally improving their capability around climate and ESG
• confirms it will take an “appropriate and proportionate approach” to the use of its new criminal powers
• wants to continue to improve diversity across the pensions industry.

TPR’s latest DC Trust report shows a continued decrease in the number of DC schemes

TPR has published its 12th DC Trust report, its annual publication showing the number, membership and assets of DC schemes in the market.  It shows that the number of DC schemes as of December 2021 stood at 27,700, down from 45,150 in 2011, and down 2% since the last report published on 30 March 2021.

The report also highlights:

• the total amount transferred into DC schemes rose by 134% last year, from £3.7 billion to £8.6 billion
• that this year the average assets per membership at retirement was £5,100 – a 3% fall since the beginning of last year and a 73% decrease since the beginning of 2015.

TPR expects “this trend of DC consolidation to continue as small schemes are now required to demonstrate that they provide value for members”.

FSCS publishes research showing that one in five people have not checked the value of their pension pot

The FSCS has published new research, which was commissioned to discover people’s attitude towards the safety of their pension, on 26 January 2022.  The data suggests that one in seven people (12%) “don’t know” when they last checked the balance of their pension pot, with a further 20% admitting to having never checked the value of their pension.

Financial regulatory bodies agree to a Wider Implications Framework

A press release by the Financial Ombudsman Service on 25 January 2022 confirmed that a formal agreement, the Wider Implications Framework, has been agreed between TPR, FSCS, FCA, MaPS and the Financial Ombudsman Service.

The Framework sets out a structure for its members to “collaborate on matters of common interest” with the aim of achieving a better outcome for consumers, small businesses and the financial services industry, where compatible with members’ independent statutory roles and functions. It builds on existing collaboration already in place and is intended to give greater transparency for wider stakeholders.

ICO launches “major listening exercise”

John Edwards, the current Information Commissioner, is launching a “major listening exercise” to hear from businesses, organisations and people about their experiences of working with the ICO, with the aim of improving its services. As well as an online survey, there will also be a series of events held across the UK.

TPO launches Pensions Dishonesty Unit

Following several recent high value determinations by TPO, it has established a dedicated Pensions Dishonesty Unit to investigate allegations of serious breaches of trust, misappropriation of pension funds, and dishonest or fraudulent behaviour by pension scheme trustees.

TPO explains that the principal aim of the Pensions Dishonesty Unit is to hold the wrongdoers responsible for the unlawful gains they have made and ensure they repay these monies to the scheme members. While some of the schemes may also be eligible for the Fraud Compensation Fund, the intention is that any money obtained for the members through TPO’s process will come “directly from the hands of those responsible”.