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 publishes statement on cyber security incident
- TPR publishes blog and updates guidance on dealing with employer distress
- PDP publishes progress update report
- DWP publishes automatic enrolment alternative quality requirement call for evidence
- FCA comments on its expectations in relation to the consumer duty
- PLSA to update current guidance on pension sharing on divorce charges
On 12 May 2023, TPR published a statement on a cyber security incident recently experienced by Capita. TPR reminds trustees who use Capita’s services to check whether their scheme’s data could be affected, and to be prepared to answer member queries. Trustees of affected schemes are expected to:
- contact members to warn them about the risk of scams
- update members while it is confirmed whether a data breach has taken place
- ensure they have a robust cyber security and business continuity plan in place.
TPR may ask trustees to explain what steps they have taken in response to the incident.
TPR published a blog on 10 May 2023 discussing how trustees should remain “vigilant to further economic challenges” which may impact the ability of employers to support their DB scheme. Trustees of DB schemes are urged to revisit TPR’s guidance on sponsoring employer distress, which has been updated in light of the ongoing challenges, and “take appropriate action”, including having appropriate covenant monitoring in place.
On 10 May 2023, the PDP published its seventh progress update report, covering the period since October 2022 and areas of focus up to October 2023. Updates include:
- work on the reset pensions dashboards programme, including amendments to the Pensions Dashboards Regulations 2022, “will continue over the coming months”, with more information expected ahead of Parliament’s summer recess
- once the Government has set out its new connection approach in legislation, the FCA intends to make a corresponding change to the connection deadlines in its rules for FCA regulated pension providers
- the PDP commissioned research into users’ understanding of how their data will be used in pensions dashboards. Feedback was positive and will be used to develop the consent and authorisation wording that will appear on dashboards.
On 15 May 2023, the DWP published a call for evidence inviting views on the alternative quality requirement test for DB and hybrid schemes. These requirements allow for simpler alternative tests for DB and hybrid schemes to demonstrate they are of sufficient quality to be used for automatic enrolment purposes. The review also looks at the alternative quality requirements for CDC schemes.
The DWP reviews whether the Government’s policy intentions in this area are being achieved every three years. This review focuses on how the simplifications and flexibilities work in practice, and whether any new issues have arisen since the last triennial review in 2020. The call for evidence closes on 19 June 2023.
With the FCA’s consumer duty coming into force from 31 July 2023 (initially applying to new and existing products or services which are open to new business), the FCA is encouraging firms to ensure they are ready. In a speech delivered on 10 May 2023, Sheldon Mills, the FCA’s Executive Director, Consumers and Competition, commented that the FCA will “act swiftly and assertively where it finds evidence of harm or risk of harm to consumers” and will prioritise the most serious breaches of the new duty.
In a letter addressed to SIPP operators, firms are reminded that the consumer duty and the cross-cutting obligation to act in good faith “will introduce a requirement to take appropriate action… where firms identify that they have caused foreseeable harm to a retail customer.” The FCA expects to see a “significant change in firms’ behaviour towards upheld complaints” as a result of this requirement.
The FCA has also shared its findings from a review of firms’ fair value assessment frameworks, highlighting good practice and areas for further consideration, which will be of interest to firms to which the “price and value” outcome of the consumer duty applies.
The PLSA intends to update its current guidance on the recommended scale of charges by occupational pension schemes for providing information in relation to, and implementing, pension sharing orders. To inform the updated guidance, PASA and PLSA have asked their members to complete a survey, requesting feedback on the typical range of charges and how they are determined. The survey closes on 26 May 2023.