Govt plans for TCFD reporting regulations to be in place by COP26

Pensions Minister, Guy Opperman, has confirmed plans for the new climate-related reporting requirements outlined in the Pension Schemes Act to be “on the statute book” ahead of COP26, with work on other supporting regulations continuing “at pace”.

Opperman highlighted the Pension Schemes Act, which gained Royal Assent yesterday, as a “tremendous team effort at the Department for Work and Pensions”, while noting that further work is still needed on the supporting regulations.

"It is often forgotten about how important that is, so the number one priority for me is to drive forward the regulations and ensure we get the nuts and bolts of all of this precisely right," he stated.

“I will be taking as much time as I possibly can to be involved in that going forward, but certainly we regard this as a major milestone, particularly amid Covid and particularly in these times.

“But more particularly we need to take it forward, and actually get the meat on the bones, get the regulations done, and get everything up and running.”

The minister confirmed his ambition for the Taskforce on Climate-related Financial Disclosures (TCFD) regulations outlined in the Pension Schemes Act to be on the statute book ahead of COP26 in November.

“We hope to have the TCFD regulations on the statute book, in other words, live for the whole business, before COP, that’s the target,” he said.

“I really want to go to COP and for the Prime Minister to be able to say, we are not only leading the world in terms of our aspirations for pensions, but actually look at us, it is on the statue book. That is a very big deal in my view, it really is."

He added: “We have huge purchasing power in our pensions, and making sure that people are suitably informed, and the principles behind environmental, social and governance (ESG) are actually driving us forward, seems to me as massively important.

“That’s something that I would be exceptionally proud of and I think this country should be very proud of.”

In addition to this, Opperman stressed that the Pensions Schemes Act will “100 per cent” speed up work on the dashboards, highlighting the legislation as an “enabling act” for detailed secondary legislation.

He also noted that whilst some organisations had been reluctant to allocate budget to dashboard data work until the legislation was passed, these companies will hopefully now move “a lot faster”.

The government will now need to focus on the “next hurdles” around the pensions dashboards, including the appointment and recruitment of providers, agreeing data standards, with Opperman highlighting the project as “probably the biggest public sector infrastructure project from a data point of view that the government has done in quite some time”.

Opperman also confirmed that regulations around the new powers introduced to help trustees combat pension scams are still on track to be introduced by September/October.

However, the minister stated that the government is not in a position currently to progress legislation on defined benefit superfunds, despite work on this continuing “at pace”.

He stated: “As I discussed in the committee stage at length, we are not in a position that we could progress a superfunds piece of legislation at the moment.

"Superfunds would be a certainly 50 probably 100 clause bill, I haven’t responded to the consultation, and there is still extensive work being done with The Pensions Regulator (TPR, Prudential Regulation Authority, HMT and stakeholders to try to drive forward not only the interim regulations from TPR but also what a final version would look like.

"Now there is a lot of work being done, but it is work that continues at pace."

In addition to this, he confirmed that he does not have a second bill to put forward in the next Queen's Speech.

"That doesn’t mean to say though," he clarified "that between May 2021 and May 2024, which is 99 per cent likely to be the next general election, we won’t have the opportunity to prepare a second bill.

“Certainly, there is a lot that we are looking at with a view to doing, but clearly superfunds would be the major part of such a bill if we are proceeding to take that forward, which has got to be confirmed yet but certainly is the indication that we will be doing so.”

Opperman also stated that if the DWP was to proceed with a second bill, he would hope for this to include auto enrolment (AE) provisions and recommendations, as outlined in the 2017 recommendations.

However, he emphasised that whilst the government remains “committed” to the 2017 recommendations, the decision as to when to proceed with these steps is a decision for “all of government”, with the chancellor representing a “major player” in that.

“Clearly if you want to do something by the mid-2020s, the ideal would be that you would do that prior to the next general election to allow a degree of lead time, so at some stage, government has got to grasp that."

Despite this, Opperman acknowledged that the pandemic has "gotten in the way", adding that "there’s no doubt whatsoever that doing this at time when organisations are fiscally strapped is complicated.”

Furthermore, Opperman emphasised that is not the only 2017 recommendations that should be considered, stating that he has been undertaking a “serious assessment” of “AE 2.0” looking at the issues around this, including small pots and costs and charges, confirming ambitions for this work to continue “very significantly” this year.

Opperman also commented on ongoing work in relation to mid life MOTs, after anamendment to the Pension Schemes Bill, which would have seen automatic pension guidance, was defeated.

He acknowledged that whilst the stronger nudge "will make a difference" there is work to be done around earlier interventions, stating that he is "absolutely convinced" that the mid-life MOT, suitably rolled out, "will really make a difference".

"We’re doing quite a lot of work on the mid life mot, and I genuinely believe we will, slowly but surely, work with the FCA, and other key partners, to produce an intervention, between the ages of 45 and 50," he added, emphasising the importance of learning lessons from the private sector.

In addition to this, the minister confirmed that whilst the Pension Schemes Act will go some way to help with pension scams, work is still ongoing to tackle the 95 per cent of the problem stemming from clone sites, confirming that Google has written to the DWP, and that there is an ongoing dialogue between the two.

    Share Story:

Recent Stories

Understanding data
Laura Blows discusses the importance of understanding data for trustee administration projects with ITM sales director, Mark Adamson

Are current roads into retirement delivering member value?
Laura Blows explores HSBC Master Trust’s recent report, Converting pension pots into incomes, with HSBC Retirement Services CEO, Alison Hatcher.

Savings and finance at retirement
Laura Blows is joined by Claire Felgate, Head of Global Consultant Relations, UK, at BlackRock, to discuss savings and finance at retirement. Please click here for an edited write-up of the video

Pension portfolios – the role of asset-backed securities
Laura Blows is joined by Royal London Asset Management (RLAM) head of sterling credit research, Martin Foden, and its Senior Fund Manager, Shalin Shah to discuss the role of asset-backed securities (ABS) within pension fund portfolios
Incorporating ESG into fixed income
Laura Blows is joined by TCW head of fixed income ESG, Jamie Franco, to discuss incorporating environmental, social and governance (ESG) strategies into fixed income portfolios