7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.
In this 7 Days
- TPR updates DB superfunds guidance
- DWP updates pensions dashboards deferred connection guidance
- PASA publishes guidance on DB benefit accuracy
- APPT publishes review of trustee accreditation scheme
- MaPS publishes report on pension scams
Following the DWP’s consultation response published on 11 July 2023 confirming it would progress the legislative framework for DB superfunds, TPR has concluded its review of its DB superfunds guidance. Reflecting the outcome of the review, TPR published updated guidance for DB superfunds and for trustees and employers.
Feedback received during the review included that:
- a longer period is needed for a superfund transfer to take place once the gateway tests are met
- “further clarification in the guidance on the gateway process and clearance” would be beneficial, and
- the ability to extract profits before members’ benefits were bought out was, for some, “an important feature to enable superfunds to establish in the market”.
The updated guidance reflects the feedback received. In a blog published on 10 August 2023, TPR explains that its guidance has been amended to “ease the way for schemes transferring to a superfund” and give more clarity on the assessment process, among other changes. In relation to extracting profit, TPR will “engage further with industry on how this will work” and issue a further update in due course.
The DWP updated its pensions dashboards guidance on deferred connection on 9 August 2023. The update incorporates the new single connection deadline for all in-scope schemes of 31 October 2026 (see 7 Days).
The guidance explains how and when a scheme may apply to defer its connection deadline by up to 12 months. To do so, trustees must have taken certain actions to transfer to a new administrator before 9 August 2023, and show that complying with the connection deadline would be disproportionately burdensome or would put the personal data of members at risk.
Applications must be submitted by 8 August 2024. In the case of any applications made before the guidance was updated on 9 August 2023, the DWP will contact applicants to clarify their status.
On 14 August 2023, PASA’s Data Working Group published new guidance on benefit accuracy for DB schemes, building on earlier publications including guidance on data management plans. Intended to help trustees ensure benefits are accurate and remain so in the future, the guidance covers five areas:
- benefit specifications, documenting the basis for calculating all of a scheme’s benefits
- data specifications, documenting the relevant data items required to construct benefits
- benefit audits, reviewing the accuracy of benefits put into payment
- automation of benefit calculations, and
- the key considerations for carrying out independent benefit and data audits.
On 9 August 2023, the APPT published the outcome of its review of the APPT trustee accreditation framework and process, launched in 2020. Having originally intended to carry out a consultation on its findings, the APPT Council concluded it was more valuable to publish the review at this point “in view of the DWP/HMT call for evidence on Pension Trustee Skills, Capabilities and Culture”.
The joint DWP/HMT call for evidence includes questions around the possible introduction of accreditation requirements, such as requiring schemes to have a certain proportion of accredited trustees. The review “provides background information that is expected to be useful” to those considering it (see our Alert for details of the call for evidence).
The APPT Council found that the accreditation scheme “has worked well” within the current regulatory environment. Some follow-up actions are noted, such as giving further consideration to the merits of requiring a higher-level examination, “at least for those without other relevant professional qualifications” or experience.
On 10 August 2023, MaPS published findings from a review into pension scams. The report recommends “actionable and evidence-based strategies and interventions” that MaPS and others, such as pension providers, could adopt to reduce the risk of scams and better support those affected. One suggestion is to introduce more “positive friction” in the process of completing a transfer after an amber flag has been raised, by MaPS requiring individuals to confirm whether they want to proceed with a transfer after attending a pensions safeguarding appointment.