Welcome to our monthly update on current legal issues for trustees of DC and hybrid pension schemes, designed to help you stay up to date with key developments between trustee meetings and to support the legal update item on your next trustee agenda. We also have a separate DC-only briefing.
Dashboards: updated standards published
The Pensions Dashboards Programme has published updated versions of the standards that need to be complied with for connection to pensions dashboards. Schemes – or administrators/integrated service providers (ISPs), where they are facilitating dashboards connection – must comply with the standards to allow connection before the relevant deadline.
Action: Ensure your scheme/administrator/ISP is on track for complying with the standards in time for your dashboards connection deadline.
Neonatal care leave from April 6, 2025
From 6 April 2025, employees will have the right to take up to 12 weeks' leave if they have a child who is receiving neonatal medical care. The draft regulations setting out this new right include requirements in relation to pension provision which broadly align with other family leave. These regulations have not yet been finalised and promised guidance has not been published; once they have, scheme rules may need to be updated to reflect the new requirements.
Action: Consider whether a rule amendment is required.
Clearing exemption to continue
The government has confirmed that an exemption which prevents pension schemes from having to comply with clearing requirements for over-the-counter derivatives will continue indefinitely (it was scheduled to expire on June 18, 2025). Draft regulations making the necessary legislative changes have been published. This relates to the UK clearing exemption only; the similar EU exemption for European pension scheme arrangements has already ended.
Action: Stand down any changes planned based on the June 18, deadline.
Accessing DB surpluses: new rules expected
The government has announced that it will change the rules on accessing surpluses in DB schemes, to allow extraction of funds with the agreement of trustees and employers. Further details will be published in spring.
Action: Keep a watching brief, especially if your scheme has a surplus; employers may well want to utilise the new rules and trustees will need to be prepared to navigate this.
Watch this space
- The forthcoming Pension Schemes Bill is expected before Parliament's summer recess. It is due to cover measures including the automatic consolidation of deferred DC small pots, the introduction of a standardised Value for Money test for DC schemes and the framework for commercial DB consolidators (superfunds). It will also introduce duties for trustees to offer decumulation options to members and will remove the need for pension schemes to apply to the County Court to enforce the recovery of an overpayment following a TPO decision.
- Following November's Mansion House Speech, the government published an interim report on its Pensions Investment Review, with a consultation on proposals for accelerating consolidation in the DC market. The key proposal is that master trusts and GPPs used for auto-enrolment should have a maximum number of defaults of a minimum size. The government is also seeking views on new duties for employers to consider the value provided by pension arrangements. These measures may be included in the upcoming Pension Schemes Bill. The Pensions Minister has announced that the final report on the Review will be published in the coming weeks.
- There is currently no date for revised regulations on changes to the notifiable events regime.
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.
