Pensions industry legal update - August 2022

While the sun may still be shining, the back-to-school season is in full swing, and as students begin preparing to return to their studies, the pensions industry has a number of legal considerations to be preparing for.

In a recent update, Squire Patton Boggs noted that trustees who run a non-standard pension scheme set up under trust should "take note", as they only have until 1 September 2022 to register your pension scheme with HMRC's Trust Registration Service.

According to Sackers, trustees may also wish to confirm with investment advisers whether there are any further actions for their scheme in relation to LIBOR, after the Financial Conduct Authority (FCA) outlined further actions needed in relation to LIBOR transition earlier this month.

And there is much more on the horizon for pension scheme trustees to prepare for, as autumn 2022 looks set to be a busy time for the pensions industry.

Squire Patton Boggs pointed out that 1 October will see "the usual flurry of pensions legislation that comes into force", as pension schemes with £1bn or more in assets will come into scope of the climate change and governance reporting requirements, as well as new Paris-aligned disclosures for all schemes subject to the TCFD requirements.

Commenting on the upcoming TCFD requirements, however, Sackers noted that The Pensions Regulator (TPR) has acknowledged the challenges faced by some schemes in relation to the availability, quality and consistency of data used when carrying out climate-related reporting obligations.

In light of this, Sackers pointed out that TPR does not anticipate issuing any penalty notices to trustees of schemes that publish their first reports over the coming months, except where the report has not been published or it is clear the trustees have not made a genuine effort to comply.

Climate is not the only area of focus though, as 1 October will also bring new regulations introducing simpler annual benefit statements for those pension schemes that provide defined contribution benefits only, which are also used for automatic enrolment purposes.

Under the new regulations, these schemes will be required to produce information in a format that does not exceed one double-sided sheet of A4 size paper when issuing a paper statement and the equivalent length when the information is printed, if issuing an email or online statement.

Regulations incorporating into pensions legislation the Competition and Markets Authority (CMA) order in relation to the investment consultancy and fiduciary management market will also be introduced from 1 October.

"Hopefully, this will simplify the compliance certification process for trustees, who will no longer have to make a direct submission to the CMA," Squire Patton Boggs stated.

"Instead, they will confirm compliance with the CMA order via the annual pension scheme return."

Yet more could still be on the horizon, as TPR's revised Single Code of Practice is expected to be in place for autumn 2022.

In light of this, Sackers suggested that trustees should start, or continue, work now so they are in a good position to deal with any outstanding requirements when the code comes into action.

In particular, the law firm encouraged trustees to have a training session on the new code, prepare a project plan, and to carry out a gap analysis to assess how existing policies and procedures compare against those listed in the code.

Many are also expecting the long-awaited response to the notifiable events regime to be published, although Squire Patton Boggs stated earlier this month that "we still do not know when changes to the notifiable events regime, introduced by the Pension Schemes Act 2021, will come into force".

Preparations for pensions dashboards are also ramping up, with both pension scheme trustees and administrators urged to take action "now".

In light of this, Sackers has identified a number of steps that trustees should be taking, including pinpointing their staging date, bringing employers into the loop, and getting their data "dashboard ready".

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