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
- DWP responds to pensions dashboards consultation
- DWP responds to call for evidence on social risks and opportunities
- TPR, TPO and PPF publish Annual Reports and Accounts
On 14 July 2022, the DWP published a response to its consultation on pensions dashboards, which sought views on a range of policy areas relating to the creation of the dashboards system, as well as on draft regulations (see our Alert for more detail about the consultation itself). Alongside the response, the DWP published a summary of the key policies. Key points from the response include:
- staging deadlines for the first two dashboard cohorts (large master trusts and large DC schemes used for automatic enrolment) will be deferred by two months to 31 August and 30 September 2023 respectively
- more flexibility will be given to schemes when preparing value data, including a simplified approach for revaluing deferred DB benefits, and
- trustees should prepare for their scheme’s staging date, including taking steps to rectify or remove any inaccurate data, “without delay”.
For more detail, including a summary of new staging deadlines, see our Alert.
A draft set of “standards” is expected to be published for consultation on 19 July 2022. These standards will flesh out the detail of what will be expected of trustees. Final regulations are expected to be published later this year.
On 15 July 2022, the DWP published a response to its March 2021 call for evidence seeking views on how schemes approach social risks and opportunities (see our Alert for more detail on the call for evidence). The DWP commented that trustees who do not factor in financially material social factors are “at risk of not fulfilling their fiduciary duty”. Whilst there were “strong examples of stewardship on social factors” from “a minority of respondents”, the social aspects of ESG factors is an area in which the risk management of pension schemes can be strengthened.
A new taskforce on social factors (“TSF”) will be established to help support trustees and the wider pensions industry with some of the challenges around these risks. The TSF will lead work to, amongst other things, identify reliable data sources and other resources which could be used by pension schemes to identify, assess and manage financially material social risks and opportunities.
To help drive improvement in this area, the DWP also encourages schemes to join the Occupational Pensions Stewardship Council, and would “welcome further development” in asset managers’ approach to social factors, to become more detailed and transparent.
On 14 July 2022, TPR published its 2021/22 Annual Report and Accounts, giving an overview of TPR’s performance during the 2021-2022 business year. While the majority of its key performance indicators were met, TPR has not yet consulted on the revised DB funding code since this is dependent on the consultation on funding regulations which the DWP has not yet carried out. TPR expects to publish the draft DB funding code in late summer 2022.
Among other updates, the report notes that TPR continues to work with the government to support the development of the legislative framework for superfunds, which it anticipates being introduced during 2022-2023.
TPO and the PPF have also published Annual Reports and Accounts. The PPF report and accompanying blog emphasises the PPF’s focus on reviewing its funding strategy. This review is in the final stages, and assuming the funding position remains robust over the next three-year period, the PPF’s expectation is that it will look to reduce how much levy it collects.