At a glance...
Issues affecting all schemes
- CMA COMPLIANCE STATEMENTS
Deadline for submission of compliance statements is approaching
- FRAUD COMPENSATION LEVY
Consultation on an increase to the levy ceiling
- CLIMATE CHANGE
Consultation on Paris Agreement alignment reporting for schemes
- SUSTAINABILITY
Proposed new disclosure requirements
AUTUMN BUDGET
Announcements on the DC default fund charge cap and net pay arrangements
PENSIONS OMBUDSMAN
Guidance on communications and avoiding complaints
COVID-19
Extension of some temporary HMRC pension administration process changes
Issues affecting DB schemes
- SCHEME RETURN
New requirements for more detailed asset class information
CONTRIBUTION NOTICES
Updated Pensions Regulator code of practice
Issues affecting DC schemes
- ANNUAL BENEFIT STATEMENTS
New simplified statement format requirements
GATED FUNDS
Updated Pensions Regulator guidance
- Action required
- Follow development and keep under review
Issues affecting all schemes
CMA compliance statements - deadline approaching
Trustees have until 7 January 2022 to send a compliance statement to the Competition and Markets Authority (CMA) confirming that they have complied with the CMA's requirement to set objectives for their investment consultants and its requirements for the carrying out of tender exercises for fiduciary managers.
Even where trustees do not use a fiduciary manager, their compliance statement must cover their compliance with the requirements in relation to fiduciary managers. In this instance, trustees are compliant because they do not use a fiduciary manager.
Action
Trustees should ensure that they submit their compliance statements by 7 January 2022, using the template form of wording set out in the CMA's order (see the definition of "Compliance Statement" in Part 2).
Fraud compensation levy - levy ceiling
The government is consulting on an increase to the fraud compensation levy ceiling for the 2022/23 levy year onwards. The change is being proposed in light of an expected increased number of claims on the Fraud Compensation Fund (FCF) following a recent court decision that pension liberation schemes that satisfy specified criteria are eligible to claim on the FCF.
The levy ceiling is currently £0.75 per member for eligible schemes and £0.30 per member for master trusts. The government is proposing to increase the ceiling to £1.80 and £0.65 respectively. The consultation closes on 10 December.
Action
Trustees should keep the progress of the consultation under review.
Climate change - Paris Agreement alignment
The government is consulting on requiring schemes that are subject to the climate changerelated governance and reporting requirements to calculate and disclose a portfolio alignment metric setting out the extent to which their investments are aligned with the Paris Agreement goal of limiting the increase in the global average temperature to 1.5°C above pre-industrial levels.
The climate change governance and reporting requirements apply to schemes with £5 billion+ of assets from 1 October 2021 and to schemes with £1 billion+ of assets from 1 October 2022.
The government is also consulting on:
- Draft changes to the statutory guidance on the climate change-related governance and reporting requirements.
- Draft non-statutory guidance explaining best practice in relation to those sections of the statement of investment principles which set out the
- Draft statutory guidance explaining the government's expectations in relation to the implementation statement.
The consultation closes on 6 January 2022 and the proposed new requirements will come into force for scheme years starting on or after 1 October 2022.
Action
Trustees should keep the progress of the consultation under review.
Sustainability - proposed new disclosure requirements
The government has published its roadmap for Phase 1 of its strategy to "green" the financial system and align it with the UK's net-zero commitment. Under Phase 1, new economy-wide "Sustainability Disclosure Requirements" (SDR) will require trustees of certain pension schemes to disclose their sustainability-related risks, opportunities and impacts. A consultation on the SDR for pension schemes is expected in 2022, with the requirements likely to be introduced for schemes with assets of £5 billion over the next 2-3 years and subsequently for schemes with assets of £1 billion+
Action
Trustees should keep the progress of the expected consultation under review.
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Originally published on October 2021
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