7 days

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 authorises first CDC scheme

On 13 April 2023, TPR announced it has authorised the UK’s first CDC pension scheme. This follows the introduction of the legislative and regulatory regime enabling such schemes in August 2022 (see our Alert for more details).

CDC schemes, which are authorised and supervised by TPR, are an alternative to traditional DB and DC occupational pension schemes. In CDC schemes, employers and employees contribute to a collective fund, which provides members with an income in retirement. Unlike a DB pension, the income level may be adjusted depending on investment performance and the available assets. Currently, CDC schemes can only be established by single and connected employers, though the DWP has consulted on proposals to enable non-connected multi-employer CDC schemes (see our Alert for more details). A list of authorised CDC schemes is available on TPR’s website.

TPR publishes blog on ESG and climate reporting

On 14 April 2023, TPR published a blog explaining why TPR is putting “extra emphasis” on compliance with ESG and climate reporting duties, and its expectations of trustees. TPR wants to see trustees “demonstrate they are considering” financially material ESG factors, including but not limited to climate change, to properly protect savers’ pensions.

As part of its campaign on climate reporting compliance (see 7 Days for more details), TPR will check that trustees of schemes in scope of the requirements have published a SIP, including consideration of financially material ESG factors, and an implementation statement (“IS”), showing how the principles in the SIP have been implemented. After finding that many schemes failed to provide correct web addresses for their SIP and ISs through last year’s scheme return, TPR is “monitoring the situation” and warns that enforcement action may be taken in relation to compliance failures.

Trustees are encouraged to develop a climate action plan setting out what actions (if any) they expect to take and when. TPR will “continue to support” trustees in meeting expectations, including producing its updated covenant guidance for DB schemes “this year”, which will contain information on assessing climate impact on employer covenant.