Preparing for Pensions Dashboards: Key Actions for Trustees and Scheme Managers

As automatic enrolment brings more people into pension saving, the need for savers to access a comprehensive view of their retirement pots becomes increasingly important. To support this vision, pension schemes must be ready to meet their obligations regarding pensions dashboards.

Yesterday, in an interesting article called “Act now on pensions dashboards so we don’t have to” The Pensions Regulator outlined clear expectations for trustees and scheme managers on compliance, emphasising the importance of accurate data and timely preparation. As highlighted in the article, by taking the necessary steps now, schemes can avoid regulatory enforcement and help savers secure their financial future.

Here are some key actions for trustees and scheme managers:

1. Read the guidance: Understand and comply with both The Pensions Regulator (TPR) and Department for Work and Pensions (DWP) guidelines.

2. Plan connection: Ensure timely and orderly connection to pensions dashboards, reducing risks of non-compliance and reputational damage.

3. Manage resources: Implement robust controls and contractual agreements with service providers.

4. Improve data quality: Continuously review, improve, and maintain accurate member data.

5. Manage risk: Identify, evaluate, and mitigate risks through effective governance and controls.

6. Maintain records: Keep clear records of decisions, advice, and data-related actions.

7. Report breaches: Promptly report and address any breaches to prevent regulatory enforcement.

8. Monitor progress: Work closely with third parties to ensure compliance and meet dashboard deadlines.

If you have any questions or need assistance with implementing these actions, please feel free to contact us for support.

HPW

DB Funding Code of Practice laid in Parliament

The Pensions Regulator’s ("the Regulator's") new Code of Practice on Funding Defined Benefits ("the Code") was finally laid before Parliament on 29 July 2024.  Trustees and scheme sponsors now have sufficient clarity on the Regulator’s guidance and expectations for valuations with effective dates on or after 22 September 2024 to allow valuation planning to commence.

The new Code reflects changes made to the final version of the funding and investment strategy regulations that came into force on 6 April 2024.  The Regulator has highlighted greater flexibility in the final Code, including: 

• Clarifying that trustees retain flexibility to set scheme-specific investment strategies;

• Allowing trustees more flexibility over how to test the high resilience of their low dependency investment allocation;

• Greater clarity on how to assess covenant reliability and longevity; and

• Allowing trustees to recognise in their statement of strategy any scheme plans to remain an open scheme.

There are also a number of changes to some of the relevant definitions and key parameters.  “Smaller schemes”, for which some limited easements apply to the detailed requirements, are now defined as schemes with 200 members or fewer, excluding certain members such as those with DC benefits only or fully insured annuities.  In addition, the key definition of “significant maturity” has been reduced from 12 to 10 years (8 years for cash balance schemes).

The new Code will come into force formally during the autumn, once it has been before Parliament for 40 days.  Further details are due from the Regulator in the coming months including the filters it will use when assessing valuations.  Other publications still to come include a consultation on updated covenant guidance and its final statement of strategy to be accompanied by its response to its March 2024 consultation.

Virgin Media Limited v. NTL Pension Trustees II Limited

The recent decision from the Court of Appeal upheld that amendments to a contracted-out pension scheme's rules that affect contracted-out rights (technically known as Section 9(2B) rights) are void if made without the required actuarial confirmation as mandated by Section 37 of the Pension Schemes Act 1993 and Regulation 42 of the Occupational Pension Schemes (Contracting-out) Regulations 1996.

This ruling impacts historical amendments made between 1997 and 2016, potentially increasing scheme liabilities if such amendments are found to be void due to missing actuarial confirmation.

Trustees and Employers may wish to review past amendments from 1997 to 2016 to ensure they comply with the requirement for actuarial confirmation. This involves checking if the necessary confirmation was obtained and documented at the time of the amendment.  If there is doubt about whether the confirmation was obtained, Trustees may need to search through historical records, including emails and other correspondence, for evidence.

Trustees and employers should stay informed about any developments and be prepared to adjust their actions based on the final legal outcome.  Note that it is possible that the DWP will intervene to bring in legislation to permit retrospective actuarial confirmations.

HPW’s Investment Market Review

Please find here HPW’s Investment Market Review of the second quarter of 2024.

For more information please contact Investment@hughespricewalker.co.uk

Kind regards

HPW investment

International Pride Day

Today, we proudly celebrate International Pride Day!  

At HPW, we stand with the LGBTQ+ community, honouring diversity and inclusion.

To our LGBTQ+ colleagues, clients and allies: We see you, support you, and celebrate you.

Happy International Pride Day!

#PrideDay #LoveIsLove #LGBTQ #Inclusion #Diversity #Pride2024

News: the General Code of Practice comes into force today

The General Code of Practice (“the Code”) came into force today, 28 March 2024.  It sets out the Pensions Regulator’s (“the Regulator’s”) expectations of the “conduct and practice governing bodies should meet to comply with their duties in pensions legislation”.

The Code has combined 10 existing codes of practice into one set, as shown in the following table.  The existing codes of practice which now fall under the Code have been erased in their entirety.

The Code is split into 51 smaller modules and sets out, among other things, what issues should be considered by trustees of pension schemes when completing their Effective System of Governance (ESOG).  In addition to having an ESOG in place, schemes with 100 members or more must carry out and document their Own Risk Assessment (ORA) as part of the ESOG.

Further information on the ESOG and ORA, and how the Code applies to different schemes, are in our previous article.

Summary of Recommended Actions

The code explains that the Regulator will permit some flexibility as it acknowledges that each scheme is different, and an element of proportionality may be used when assessing the governance needs of each scheme.  If you have any questions on how to identify the areas which need to be improved upon to ensure compliance with the Code, please contact us to discuss this in more detail.

TPR D&I survey: lack of diversity in pension boards

The Pensions Regulator (TPR) conducted its first trustee diversity and inclusion survey, revealing that most pension trustees in the UK are white men over 45.

Results of the survey published today, completed by 2,197 trustees, emphasised the importance of diverse and inclusive boards for effective decision-making and governance. While most trustees recognise this importance, only a minority of schemes have taken action to improve diversity.

While the survey highlights the lack of trustee diversity in terms of protected or visible characteristics such as ethnicity, most trustee boards were seen as diverse in terms of skills (82%), life experience (74%), professional background (73%), cognitive diversity (73%) and education (61%).

The survey found that professional and corporate trustees were more likely to have taken action in this regard.

Additionally, the role of the chair was identified as crucial in driving diversity and inclusion efforts within trustee boards.

The survey results underline the need for ongoing efforts to enhance diversity and inclusivity within pension scheme governance.

The new DB funding code

Introduction

The Pensions Regulator (“the Regulator”) is expected to introduce the new Defined Benefit (DB) funding code (“the Code”) in summer.  The Code will apply to valuations with an effective date on or after 22 September 2024.  The draft code can be found here: Draft DB Funding Code of Practice.

Long term planning

A significant aspect addressed in the Code is long term planning for schemes.  Trustees are required to establish a plan for the long term funding of their scheme, which includes:

• Setting a long term objective detailing how benefits are to be provided and the funding level to be attained by the ‘relevant date’; and

• Creating a journey plan outlining the path to achieving the long term objective from the current funding position.

The target funding level must be at least 100% on a ‘low dependency’ basis, i.e. a basis under which no further employer contributions would be required if the scheme was fully funded.  The trustees will determine the ‘relevant date’ which must be no later than the scheme year in which significant maturity is reached, as estimated by the scheme actuary.

The journey plan should consider the employer covenant and scheme maturity whilst ensuring adequate liquidity.  A higher level of risk will be acceptable if the employer covenant is strong.

After the ‘relevant date’, trustees should invest in line with a ‘low dependency’ asset allocation.  Cashflows should be broadly matched between assets and liabilities, and the funding level should be resilient to short term adverse changes in the market.  The asset allocation must be set using prudent assumptions and include sufficient liquidity to ensure no further contributions are expected from the employer once the scheme is fully funded.  Scheme liabilities must be calculated on a basis consistent with the ‘low dependency’ strategy.

Employer covenant

Another area of focus is on employer covenant, i.e. the ability and willingness of the employer to fund the pension scheme.  Previously, covenant considerations have been backwards looking, focusing on past performance.  The Code encourages trustees to engage in more detailed, reliable and forward-looking covenant assessments, as it is the future cashflows of the company that actually determine its ability to contribute to the pension scheme when required.

The Code emphasises that the following areas should be considered:

• Covenant visibility: the period for which reliable forecasts are available;

• Covenant reliability: the period for which the trustees have reasonable certainty over the employer’s level of available cash; and

• Covenant longevity: the maximum period over which the trustees can reasonable assume the employer will be able to support the scheme.

The length of these three periods should help to inform decisions around the level of risk to take and the length of the journey plan.  The Code reaffirms the overriding principle that any funding deficit should be recovered as quickly as the employer can reasonable afford.

Statement of strategy

Trustees must prepare a statement of strategy outlining the decisions taken, with the required level of detail depending on the amount of risk being taken.  Some parts, such as the general funding and investment strategy, must be agreed with the employer.  Other parts, such as supplementary details, must be set after consulting the employer, though the employer’s agreement is not required.

Trustees will not be required to invest in line with the ‘low dependency’ asset allocation immediately.  Immature schemes with a strong funding position and strong employer covenant may justify taking more risk in growth-seeking assets.  However, the Regulator expects trustees to transition towards a strategy consistent with low dependency on the employer after the ‘relevant date’, though this doesn’t mean completely excluding growth assets.

The Regulator is expected to consult on the statement of strategy in March 2024.

Regulatory approach

In addition to the Code, the Regulator will update its regulatory approach and introduce a new twin-track method: ‘fast track’ and ‘bespoke’.

Schemes qualifying for ‘fast track’ will see less scrutiny on their submission and the Regulator is unlikely to question the trustees.  Qualification is generally based on the funding basis and recovery plan length relative to the scheme duration.

If a scheme does not qualify for ‘fast track’, it will need to take the ‘bespoke’ approach.  Trustees can also choose to adopt the ‘bespoke’ approach even if their scheme qualifies for ‘fast track’ if they prefer greater flexibility or want to select an approach that suits the specifics of their scheme.  This approach requires a more detailed valuation submission and could face greater scrutiny from the Regulator.

Further details of the fast track approach, including the parameters a scheme needs to meet in order to use this approach, are given in the appendix.

Further information

If you would like any more information or wish to discuss the implications for your scheme, please contact us.

Appendix – fast track approach

The fast track parameters are outlined here: Fast track parameters.  Some key information is given below.  The information is based on the consultation document and so is subject to change.

Technical provisions funding level

A scheme’s technical provisions when expressed as a percentage of a scheme’s low dependency liabilities must hit a certain minimum level.  This minimum percentage varies by the duration of the scheme (calculated on the low dependency basis), for example:

• 12 years and below: 100%

• 20 years: 85%

• 30 years: 72%

Funding and investment stress test

Schemes need to demonstrate that, if fully funded, the scheme’s funding level wouldn’t fall by more than a certain percentage.  The maximum percentage tolerated varies by the duration of the scheme (calculated on the low dependency basis), for example:

• 12 years and below: 1.9%

• 20 years: 13.1%

• 30 years: 18.7%

The change in the funding level will be calculated as 1 – stressed funding level / unstressed funding level where:

• Unstressed funding level = the low dependency funding level

• Stressed funding level = the low dependency funding level with certain stress factors applied to both the assets and liabilities, which have been prescribed

If the results of the calculation show a lower fall in the funding level than the tolerated percentage, the scheme passed the funding and investment stress test.

Recovery period

The recovery period, if any, must be no longer than 6 years for a valuation that is being completed before a scheme’s ‘relevant date’, and 3 years for a valuation that is being completed after the ‘relevant date’.  The annual increase in contributions must be no more than the CPI inflation assumption used under the technical provisions basis, and there must be no allowance for asset outperformance.

Assumptions

The discount rate and inflation assumptions must use a yield curve for schemes with more than 100 members.  For smaller schemes, i.e. those with 100 or fewer members, a single discount rate and single inflation rate may be used, as long as the Bank of England yield is used at a duration nearest to the duration of the scheme.  Requirements for specific assumptions are as follows:

• The addition to the gilt yield curve, or single gilt yield, must be no more than 0.5%

• There must be no adjustment to the RPI assumption

• The CPI assumption must be no lower than 0.8% below RPI before 2030 and no lower than RPI from 2030

• The mortality assumption should use a recent CMI core or extended model

• The marital assumption should be at least as strong as PPF Section 179 guidance

• Options can only be allowed for to the extent that they increase the liabilities in the low dependency funding basis

Changes for the Pensions Regulator

In response to new regulations, the Pensions Regulator (TPR) is making changes to guarantee ongoing benefits for savers and reinforce its oversight.

Starting in April, three new regulatory functions will be established:

1- Regulatory Compliance (ensuring compliance)

2- Market Oversight (improving the market) and

3- Strategy, Policy, and Analysis (evolving regulations and supporting innovation)

Chair of TPR, Sarah Smart, said: “The market should expect us to engage with it differently from now on. Our new structure means we will be swifter to address compliance failures and market-wide risks while being more dynamic in our industry engagement and bringing innovation to the fore.”

These changes will be supported by essential functions like Operations, Digital, Data and Technology, and People.

Chief Executive of TPR, Nausicaa Delfas, said: “We have to make sure that workplace pensions work for savers. Our organisational changes are about bringing our talented and capable colleagues together to protect, enhance and innovate in savers’ interests.”

The changes reflect TPR's dedication to addressing compliance issues, managing market-wide risks, and fostering innovation.

Talk to us if you want to discuss any of these changes.

General code of practice

The long-awaited General Code of Practice (“the Code”) was laid in Parliament on 10 January 2024 and is expected to come into force on 27 March 2024.  It sets out the Pensions Regulator’s (“the Regulator’s”) expectations of the “conduct and practice governing bodies should meet to comply with their duties in pensions legislation”.  The Code is similar to the single code of practice first consulted on in 2021, though some small changes have been made since then.

The Regulator has confirmed that there is no specific penalty for failing to comply with the Code, however it may rely on the Code and other codes of practice in Court to evidence that a requirement has not been met.

The Code combines 10 existing codes of practice into one set, as shown in the following table.  The existing codes of practice falling under the new Code will be erased in their entirety.

The Code is split into 51 smaller modules and sets out, among other things, what issues should be considered by trustees of pension schemes when completing their Effective System of Governance (ESOG).  

ESOG

There has been a legislative requirement for an ESOG since 13 January 2019, when the Occupational Pension Scheme (Governance) (Amendment) Regulations 2018 introduced a requirement whereby “trustees or managers of an occupational pension scheme must establish and operate an effective system of governance”.  The ESOG should be “proportionate to the size, nature, scale, and complexity of the activities of the scheme” and should be regularly maintained and updated if necessary.

The ESOG should include processes and procedures to ensure compliance with the modules set out in the code.  Some modules only apply to schemes with more than 100 members, though the Regulator has said that smaller schemes may wish to adopt the principles as good practice.  In addition to combining various aspects of existing codes, the new general code also includes expectations on areas such as climate change and cyber security.

A list of the areas covered is set out below:

Own risk assessment (ORA)

In addition to having an ESOG in place, schemes with 100 members or more must carry out and document an ORA as part of the ESOG.  The first ORA needs to be completed within 12 months of the end of the first scheme year which begins after publication of the Code.  For example, a scheme with a year end date of 31 March must complete their first ORA no later than 31 March 2026.  Subsequent ORAs should be carried out at least every three years, or earlier if there are material changes to the ESOG or to the risks faced by the Scheme.  The Regulator has confirmed that for now there will be no template or guidance for completing the ORA, but this will be kept under review.

How the Code will apply to different schemes

The Regulator has not provided specific advice on exemptions from the Code for particular schemes, however it has stressed that the Code should be dealt with in a proportionate manner and has said that trustees must “use their judgement as to what is a reasonable and proportionate method of ensuring compliance for their scheme”.  This means that smaller schemes, and schemes which are currently winding up or close to buy-out, might take a different approach to the Code compared with other schemes.  It is important that trustees thoroughly document all decisions made concerning why they took a certain approach to the various modules and aspects of the Code.  Trustees should also be able to demonstrate clearly their reasons for making those decisions.

Summary of Recommended Actions

The code explains that the Regulator will permit some flexibility as it acknowledges that each scheme is different, and an element of proportionality may be used when assessing the governance needs of each scheme.  If you have any questions on how to identify the areas which need to be improved upon to ensure compliance with the code, please contact us to discuss this in more detail.

DWP published the DB Funding Regulations

The final version of the Defined Benefit (DB) Funding Regulations were published by the DWP on Monday this week alongside the response to its 2022 consultation.  The purpose of the new Regulations is to implement the requirements of the Pension Schemes Act 2021 for DB schemes to establish and maintain a formal funding and investment (F&I) strategy and submit a written statement (the Statement) of that strategy to the Pensions Regulator (TPR).  The regulations are due to come into force on 6 April 2024 and will apply to scheme valuations with effective dates on or after 22 September 2024.  TPR’s new funding code (the Code), which is designed to complement the new Regulations, is expected to be published in the coming months following its second consultation which ended almost a year ago.

Changes made to the Regulations following the consultation centre, in particular, on an attempt to “anchor” flexibilities described in the draft Code that the DWP say were always intended.  For example, the DWP asserts that the Regulations do not intend to constrain actual investments and even mature schemes can invest in a wide range of assets.  Also, it claims that the changes should provide assurance that the investment in the sustainable growth of sponsoring employers’ businesses is a matter to consider alongside the affordability principle.  For open schemes, it is confirmed that new entrants and future accrual can be taken into account in determining when “significant maturity” will be reached.

The Regulations describe the matters that trustees must take into account in their F&I strategy.  The key plank of the F&I strategy is a requirement for schemes to have reached a state of “low dependency” on their sponsoring employer by the time they are “significantly mature”.  Overall, the details are largely unchanged from the draft Regulations, but there is some clarification on scheme maturity aspects.  For instance, to counter concerns raised that using the duration of liabilities as the measure of scheme maturity can be volatile in changing market conditions, the Regulations now prescribe a fixed date of 31 March 2023 on which economic assumptions used to calculate maturity must be based.  As for the determination of significant maturity, the duration at which this point is reached will be set out in the Code, with the methodology and metrics used to calculate it set out in the Regulations and the Code.  Responding to concerns expressed over the interpretation of a “low dependency investment allocation”, the Regulations now clarify that schemes can invest a reasonable amount in a wider range of assets than, for example, government and corporate bonds, provided further employer contributions are not expected to be required.  Furthermore, the Regulations have been amended to clarify that the objective to invest in line with the low dependency investment allocation does not apply to surplus funding.

Some changes have also been made to what the Regulations require in the Statement, such as the level of detail and supplementary matters that schemes need to set out.  The intention here is to provide some flexibility for TPR to ask for less detailed information in some cases, which may ease implementation and avoid an “unnecessary administration burden”.  The Statement must be submitted to TPR as soon as reasonably practicable after it has been prepared or revised, with the submission process to be set out in the Code.  The Statement must be signed off by the appointed chair of trustees.

The revised Regulations have only just been issued and so deeper analysis and discussion among schemes and the pensions industry will no doubt take place over the coming days and weeks as we await the publication of the final Code.

TPR - New general code has been laid in Parliament yesterday

The new general code, expected to come into effect in March, has been laid in Parliament.

The structure of the new code facilitates comprehension for governing bodies, simplifying the process of meeting The Pensions Regulator’s (TPR) expectations.

The code prompts governing bodies to evaluate their schemes in alignment with TPR standards, placing a particular emphasis on fostering effective governance systems and conducting thorough risk assessments.

TPR advocates for proactive engagement, encouraging schemes to actively align with the prescribed standards.

Those that do not meet the code’s expectations should take immediate action to improve their scheme’s governance.

Should you require assistance in strengthening your governance, feel free to reach out to us. We can help you.

Click here to read the general code of practice.

The implications of the CMG case on rectifying errors in pension matters

In a recent decision (The Pensions Ombudsman v CMG Pension Trustees), the Court of Appeal has confirmed that obtaining a court order is necessary for the recoupment of overpaid pensions from members. The court clarified that relying solely on a determination by the Pensions Ombudsman is insufficient to recover a disputed sum.

Background

In 2022, the High Court, in the Pensions Ombudsman v CMG Pension Trustees, examined the trustees' authority to recoup overpaid benefits, focusing on reductions in future pension payments. Section 91 of the Pensions Act 1995 (PA95) governs set-off against pension benefits and allows trustees to recoup overpayments under specific conditions. These include (i) ensuring that deductions do not surpass the monetary obligation, (ii) providing the individual with a certificate outlining the owed amount and its impact on benefits, and (iii) in case of a dispute, waiting until the obligation is enforceable under a court order.

Summary

The court clarified that when recouping via future benefit reductions, a court declaration is sufficient, with no need for a payment order. The Court of Appeal later determined that the Pensions Ombudsman is not a competent court in this context. To enforce the Ombudsman's decision, trustees should deliver a certified copy to the County Court, which will then enforce it administratively, avoiding a rehearing of the case.

Additionally, the court addressed the interpretation of "competent court" rejecting the notion that the Pensions Ombudsman qualifies as a competent court. The court emphasised that the Pensions Ombudsman's role is distinct from a court, and his jurisdiction is one-sided, requiring a member to initiate the process.

Conclusion

Ultimately, the court dismissed the appeal, upholding the requirement for a court order from a competent court, such as the County Court and not the Pensions Ombudsman, to enforce recoupment after a dispute has been considered and determined by the Pensions Ombudsman.

TPO case - amber flag and overseas investments

The Pensions Ombudsman (TPO) recently issued its first ruling on the "amber flag" related to overseas investments within the pension transfer value regulations.

Facts:

Mr W sought a pension transfer in February 2022, triggering an amber flag due to perceived overseas investments. The Trustee required him to consult MoneyHelper. Mr W's adviser disagreed, causing a delay. His transfer was completed in May 2022, resulting in a reduced value.

Background:

The Transfer Regulations, effective from 30 November 2021, govern transfers initiated on or after that date. These regulations restrict the statutory right to transfer, imposing conditions that must be fulfilled, including evaluating the presence of red or amber flags.

Under this framework, a red flag stops the statutory transfer, while an amber flag temporarily suspends it until the member seeks specified guidance from MoneyHelper before trustees can proceed with the transfer.

Decision:

TPO ruled in favour of the Trustee, stating they acted reasonably. The decision emphasised the Trustee's right to interpret regulations and concluded that the delay was not unreasonable, considering the perceived overseas investments.

Our comment:

This case serves as a crucial support not only for pension trustees but also for administrators and providers grappling with the growing complexity of pension transfers. The intricacies involved, especially the need for additional scrutiny and consultations with MoneyHelper, have become more challenging since the Transfer Regulations came into force. TPO’s ruling provides valuable guidance, shedding light on the proper application of the "amber flag" in the context of overseas investments and giving clearer insights into how to navigate the regulatory landscape surrounding transfers and the associated requirements for member safeguards.

TPR - Regulatory intervention report

Today The Pensions Regulator (TPR) has released a report detailing regulatory and legal actions taken against Stuart James Garner, the former owner of Norton Motorcycles, who illegally invested pension schemes' money into his business.

Garner, 54, was sentenced to eight months in prison (suspended for two years) for breaching investment rules, leaving three pension schemes associated with Norton Motorcycles with a combined shortfall of £10 million and was banned from acting as a pension trustee again. He was also disqualified as a company director for three years and ordered to pay TPR’s costs.

TPR emphasised its commitment to supporting compensation efforts for scheme members through the Fraud Compensation Fund and highlighted its determination to prevent Garner from future trustee roles, making it a criminal offense if he acts as a trustee again.

Click here to read TPR report

Key priorities for TPR at the PLSA annual conference

Nausicaa Delfas, CEO of The Pensions Regulator (TPR) gave a speech on the key priorities for TPR.

She expressed gratitude for the opportunity to address the audience and emphasised the need for the regulator and the pensions industry to adapt to significant changes, particularly the shift from fragmented to consolidated pension schemes.

She outlined three main priorities:

1. protecting savers' money;

2. enhancing the system through effective market oversight and better practices; and

3. supporting innovation in savers' interests.

She stressed the importance of larger, well-governed schemes and highlighted the need for trustees to focus on value for money.

She also discussed the challenges faced by trustees and the importance of innovation, especially in retirement solutions.

The regulator plans to use its powers assertively, focus on data-driven strategies, and collaborate with various professionals to ensure good outcomes for savers in this evolving pensions landscape.

Click here to read the speech.

TPR's checklist for implementing pension dashboards effectively

Yesterday the Pensions Regulator (TPR) released an article highlighting the difficulties of tackling substantial projects and specifically addressing the preparation for implementing pensions dashboards.

Pensions dashboards represent an innovation in the pension system, aiming to enhance user experience and safeguard savers. Although there is a structured timetable for connection, adequate preparation is essential.

To simplify the overwhelming task, a preparation checklist has been introduced by TPR. This tool enables schemes to collaborate effectively, breaking down complex tasks into manageable steps.

The checklist emphasises the significance of accurate data, outlining key actions such as understanding the personal data from dashboards and planning improvements.

By utilising the checklist, schemes can ensure their data is precise and benefit from the positive outcomes beyond pension dashboards. The checklist assists schemes in visualising their goals and provides a structured approach toward achieving them. Trustees and managers have new legal responsibilities under dashboard regulations and the checklist aids them in fulfilling these duties.

Downloading and utilising the checklist is a step-by-step approach toward meeting connection deadlines and ensuring the success of pension dashboards implementation.

Download TPR checklist here.

Mansion House 2023

The Chancellor unveiled a set of innovative 'Mansion House reforms' aimed at unlocking capital within the financial services sector for the most thriving industries.

This initiative will not only boost returns for savers but also support economic growth across various sectors.

The government is introducing a range of actions aimed at enhancing the benefits for savers and improving the availability of funding for high-growth companies.

The government is:

• announcing an industry led compact committing many of the UK’s largest Defined Contribution (DC) pension providers to the objective of allocating at least 5% of their default funds to unlisted equities by 2030

• exploring demand for government to play a greater role in establishing investment vehicles, building on the skills and expertise of the British Business Bank

• publishing consultation responses on small pots and decumulation, applying additional requirements to DC schemes to support further consolidation

• publishing a consultation response setting out the intention to consult on draft regulations for whole-life multi-employer Collective Defined Contribution (CDC) schemes

• publishing a consultation response on a permanent superfunds regulatory regime for Defined Benefit (DB) schemes

• issuing a call for evidence on the role of the Pension Protection Fund and the part DB schemes play in productive finance

• launching a consultation on accelerating the consolidation of Local Government Pensions Scheme assets

Today the government has also published a joint consultation response with The Pensions Regulator and the FCA on a new Value for Money Framework for DC schemes.

https://lnkd.in/euDd4BcT
https://lnkd.in/eMJwyqfr

Time for action: make time to get your data dashboards-ready

Yesterday the Pensions Regulator (TPR) has published an article about the pensions dashboards to remind trustees and scheme managers to start working collaboratively to progress dashboards quickly and efficiently.

The Minister for Pensions laid amending regulations on 8 June to implement an approach to delivery of pensions dashboards. These regulations include a connection deadline of 31 October 2026, with anticipation that a staging timeline will be set out in guidance.

Trustees and scheme managers must:

1- understand the data that’s required to match savers to their pensions;
2- understand the data that will be sent for savers to view;
3- audit whether that data is in a dashboards-ready format;
4- verify that all data is accessible, accurate, and available digitally — a scanned document or PDF isn’t enough;
5- make sure that any gaps are filled as much as possible;
6- decide how to ‘match’ savers to their pensions;
7- consider that value data is a fundamental part of the user experience - Trustees and scheme managers will only have a limited time to provide this data — in many cases they will need to return it instantly and at most they will have three days to calculate a DC value and return it, or 10 days for a DB benefit; and
8- work with administrators to assess how much value data Trustees and scheme managers can frontload.

Here the link to TPR article https://lnkd.in/e-GpmBNZ

The ESG elephant is now in the room

Yesterday the Pensions Regulator (TPR) has published an article to explain why ignoring environmental, social and governance factors is no longer an option for trustees.

Louise Davey, Director of Regulatory Policy, Analysis and Advice at TPR explained that TPR will be carrying out a regulatory initiative (RI) in relation to statement of investment principles (SIP) and implementation statement (IS) which will have two phases.

- The first phase involves checking all trustees have published their SIPs and ISs (where they need to).
- The second phase involves a review of a cross-section of SIPs and ISs. This will be a qualitative review and only in relation to the climate, ESG and wider sustainability related provisions included in these documents.

When carrying out the review, TPR expects to focus on the extent to which the DWP guidance has been adopted by the trustees.

Where TPR believes schemes have not made a reasonable effort to define their policies in the SIP and report on how those policies have been implemented in the IS, TPR can take enforcement action.

Link to TPR article - https://lnkd.in/dqJPtB7w

Link to the DWP guidance https://lnkd.in/d75_3f4U