Pension schemes urged to use TPR Code of Practice delay to prepare

Pension schemes have been urged to use the extra time created by the delay to The Pensions Regulator’s (TPR) consolidated Code of Practice to prepare for any changes that it may bring.

Commenting on the regulator’s interim response to its consultation on the consolidated code, consultancies Barnett Waddingham and Hymans Robertson both urged trustees to use the time to review their governance practices.

TPR’s response noted that it was “unlikely” that the consolidated code would come into force before summer 2022.

The regulator acknowledged concerns, particularly from public service pension schemes, about the proposed term of ‘governing body’, and the amount of work own risk assessments (ORA) would entail.

“We welcome TPR’s commitment to clarify these key issues of concern raised by us and the public service sector, and to help develop a revised code that will truly assist with delivering a high standard of pensions governance, and which is at least as good as the code it replaces,” commented Barnett Waddingham head of benefits and governance (public service), Annemarie van Bochove Allen.

Barnett Waddingham principal and senior pension management consultant, Sara Cook, added: “The areas of concern identified from the consultation responses do not come as a surprise.

“Trustees and scheme managers may see this as a short reprieve, which will give them time to focus on other governance heavy obligations as applicable to each sector such as GMP equalisation, the age discrimination remedy in the public service schemes, simplified benefit statements, climate change strategy/disclosures and journey planning. 
“However, they should not put off having some agenda time to discuss and plan resource for what the new code will bring, though the finer details will not yet be finalised. They can use this period of breathing space to undertake a review of their governance frameworks, which will place them in a better position for any changes they need to make from next summer.”

Hymans Robertson head of governance consulting, Laura Andrikopoulos, echoed these sentiments, welcoming the update from TPR and stating that the consolidated code could have a “significant impact” on schemes’ governance processes.

“With the underlying regulations having been in force since early 2019 it is important that the UK pension system starts to comply sooner rather than later,” she continued.

“Its positive there has been so much engagement with TPR with the consultation, although this has meant the introduction has been delayed beyond the original timetable.

“Many schemes do however need to start undertaking their gap analyses now to ensure they are well prepared for the code’s introduction.”

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