The Pension Regulator's new money purchase benefits (DC) code of practice and guides in six key points

The Pensions Regulator (TPR) is replacing Code of Practice no. 13 on governance and administration in defined contribution (DC) schemes. The new Code will be approved in June 2016 and is likely to apply in July 2016. Click here for more detail on the New Code.

The new Code covers:

  • the trustee board;
  • scheme management skills;
  • administration;
  • investment governance;
  • value for members; and
  • communicating and reporting.

The new Code sets out the standards that TPR expects of trustees of schemes with money purchase benefits.

It has been designed to have all of the standards of conduct and practice in a single document.

Practical guidance, examples and TPR's recommendations are set out in six separate guides (the Guides). The Guides also set out what TPR believes represents 'best practice' in certain areas.

There is a Guide for each of the six key areas outlined above. Click here for a detailed summary of each Guide.

TPR has used the Guides to set out the processes, procedures, policies and behaviours that it considers reflect best practice.

Most of these concern communicating with members and reporting, but a couple focus on administration. Click here for an overview of the full list.

The Guides include a wide range of useful examples and checklists. These have been designed to help trustees comply with the new Code. Click here for a full list of the examples and checklists that are covered in the Guides.

The new code in more detail

What is the new code?

The Pensions Regulator (TPR) is replacing Code of Practice no. 13: Governance and administration of occupational defined contribution trust-based pension schemes (the current Code) with a new version (the new Code).

The new Code also has a new name. It will now be known as Code of practice no. 13: Governance and administration of occupational trust-based schemes providing money purchase benefits. This is a subtle emphasis that the new Code will apply in respect of money purchase benefits even if they are provided in otherwise defined benefit schemes (e.g. Additional Voluntary Contributions (AVCs).

The new Code is intended to be:

  • comprehensive - all of the standards expected of trustees will be set out in the new Code;
  • clear and unambiguous; and
  • short and simple - the new Code does not include practical guidance, examples and 'how to' guides.

A revised draft of the new Code was presented to Parliament on 9 May 2016. This draft incorporated comments from TPR's consultation. TPR cannot issue the new Code for 40 days from the date it is presented to Parliament.

The new Code is therefore expected to come into force in late June / early July 2016.

Who will the new code apply to?

The new Code will apply to trustees of:

  • occupational trust-based pension schemes;
  • with two or more members (whether active, deferred or pensioner); and
  • schemes that offer money purchase benefits (including Additional Voluntary Contributions (AVCs) within defined benefit (DB) schemes).

A broad range of schemes will therefore be subject to the new Code. These include:

  • DC schemes;
  • DC sections within schemes offering mixed benefits;
  • money purchase additional AVCs within occupational DB schemes; and
  • money purchase benefits with a DB underpin,

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.