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’s new general code of practice
- Updates to DB and hybrid scheme return
- WPC hears evidence on the DB funding regime
TPR published its long-awaited new general code of practice (the “Code”) and consultation response on 10 January 2024. The Code, which is expected to come into force on 27 March 2024, brings together 10 of TPR’s 16 current codes of practice into new “modules”. It is intended to be clearer and more accessible than the existing codes, as well as including some additional detail and new expectations.
Importantly, the Code sets out how trustees should meet the requirement to establish and operate an effective system of governance (“ESOG”), and that schemes with 100 or more members which are required to operate an ESOG should carry out and document an own risk assessment.
See our Alert for details.
TPR has published information about the 2024 scheme return process for DB and hybrid schemes, with details of new questions and updates.
Changes for 2024 include new questions on:
- fiduciary managers and investment consultancy providers, reflecting former CMA requirements which were brought under TPR oversight in 2022 (see our Alert)
- liquidity and leverage, and the controls schemes have in place. TPR will use this information to assess whether its LDI guidance is effective and to identify areas where stronger controls may be required.
TPR will send scheme return notices in “late January or early February 2024”. Scheme returns must be submitted by 31 March 2024.
Representatives from HMT and the DWP, including Paul Maynard, the Minister for Pensions, gave evidence to the WPC on 10 January 2024. Various aspects of DB scheme funding were discussed, including:
- the Government hopes to introduce legislation for DB superfunds “as soon as possible”
- the final DB funding regulations will be published “sooner rather than later”. In November 2023, TPR commented that the new regime is expected to be in force by April 2024, with effect for schemes that have valuations from autumn 2024
- the anticipated report on the impact of LDI problems on DB schemes was due by the end of 2023, but has been delayed and will be published “in due course”
- HMT will monitor any effect on scheme behaviour of the tax rate reduction on an authorised surplus repayment from 35% to 25%. The Government is expected to consult this winter on various measures including making surplus “extraction” easier.