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.

To view the full article, please click here.

Originally published on October 2021

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe - Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2021. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.