The more one looks at the night sky the more stars appear, just like new developments the pensions universe! Below are a few selected super stars likely to blaze a trail in 2022 – employers and trustees should keep these anticipated changes firmly in their sights.
|Anti-avoidance (DB schemes)||TPR’s Consultation on its proposed Policies on overlapping powers, higher monetary penalties and information gathering closes on 22 December 2021; expect finalisation of these Policies in Spring 2022.|
|Climate change||Whilst the largest schemes are already within the legislative framework, most trustee boards are likely to spend more time on climate issues in 2022. The DWP Consultation published on 21 October 2021 on various climate matters closes on 6 January 2022. See Pensions Ready Reckoner in this issue.|
|DB Funding – New Regulations and TPR Code of Practice||The timetable for the new Funding Regulations has slowed. Expect amending Regulations and a new Code of Practice from TPR by late 2022 at the earliest (under Pension Schemes Act 2021, it is envisaged that DB trustees will produce and maintain a funding and investment strategy in a written statement signed by the trustee chair).|
|DB Schemes – Notifiable Events||For a general description of the proposed amending Regulations in Pensions Ready Reckoner, click here. The operation of these Regulations for employers and trustees may well be testing. The draft Regulations, with their focus on “decisions in principle” and “main terms having been agreed”, are likely to be difficult to operate and may unnecessarily impede commercial life. Whether the Regulations will apply from 1 April 2022 and in what terms, remains to be seen. Click here for our Podcast on these issues.|
|DC Schemes||1) Trustees of DC schemes are likely soon to be required to give a stronger ‘nudge’ to members to obtain guidance where members are seeking to access their DC benefits using pension flexibilities. This is aimed at ensuring members have received guidance or opted out before the member’s application goes ahead (draft Regulations under new section 113B, Pension Schemes Act 1993). |
2) The Chancellor in his Budget on 27 October 2021 announced a further proposed Consultation on possible changes to the charge cap for DC auto-enrolment pension schemes. This is to help encourage appropriate performance fees and investment in more productive investments. It is expected the Consultation will be issued by the end of 2021.
|TPR Single Code of Practice||Trustees and Employers may struggle with this one (for background, click here for the relevant section of this Pensions Ready Reckoner). Key problems are: |
– although TPR conceives the Single Code as essentially consolidating the many existing Codes into one document, TPR is also making changes which are not always easy to identify; and
– the divide between legal requirements and TPR preferences is not always clearly drawn.
The proposed new Single Code is now not expected before Spring 2022 and is unlikely to be effective until Summer 2022, but schemes will need to well informed so they are ready to comply, particularly in relation to the new “Own Risk Assessments” for schemes with over 100 members.