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 consultation on changes to climate and investment reporting
- DWP call for evidence – Helping savers understand their pension choices
- DDCMS publishes response to consultation on data protection reform
- TPR publishes new guide to reporting pension scams
- PASA releases updated DC Governance Guidance
- FRC consults on proposed changes to TAS 100 regarding climate change and ESG
On 17 June 2022, the DWP published its response to its October 2021 consultation (see our Alert) on proposals to require trustees of schemes in scope of the climate-related governance and reporting regulations (the “Regulations”) to measure and report on the “Paris alignment” of their investment portfolios (ie the extent to which their investments are aligned with the Paris Agreement goal of limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C above pre-industrial levels), as well as on new guidance in relation to SIPs and implementation statements.
The requirement to measure and report on the “Paris alignment” will come into force on 1 October 2022, and will apply to occupational pension schemes with £1bn or more in relevant assets, as well as authorised master trusts and authorised CDC schemes.
New statutory and non-statutory guidance on reporting on stewardship in SIPs and implementation statements has also been issued.
See our Alert for more detail.
The DWP published a call for evidence on 14 June 2022 to explore what support members of pension schemes need to help them make informed decisions about how to use their savings. It also seeks to understand what support and decumulation products are currently on offer to members, and what may be offered to them in the future. The call for evidence follows measures introduced by the FCA as a result of its 2018 Retirement Outcomes Review which have created a “disparity” between contract-based and trust-based schemes in terms of communications, support and options offered to members with DC benefits.
See our Alert for more detail.
On 17 June 2022, the DDCMS published a response to its consultation on reforms to the UK’s data protection regime. The key reforms which could affect pension schemes include:
- introducing a “more flexible accountability framework”, with organisations expected to implement a “risk-based privacy management programme”. This would, among other things, still require organisations to document what and where personal data is being held and why it has been collected but, instead of complying with the current prescriptive requirements, the new flexible approach is intended to allow organisations to record information in a way “which is more tailored to the organisation”
- changes to how to assess risk when considering “alternative transfer mechanisms”, which are used when exporting data to a country that does not have an adequacy decision in place. The changes are intended to allow data exporters to act “pragmatically and proportionally” when assessing these mechanisms. Some respondents to the consultation had raised concerns that these changes could “degrad[e] data protection standards” in the UK
- reforming the ICO, including changes to its governance model, setting new objectives and a “clearer strategic vision”, as well as extending its investigatory powers.
The government decided not to proceed with a number of proposals in its consultation, including a proposed consolidation of the existing data protection legislation and the proposed introduction of a nominal fee for processing subject access requests.
The detail of the proposed reforms will be set out in the Data Reform Bill, which is expected over the coming year.
TPR published a guide to reporting pension scams on 15 June 2022. The guide details why, when and how trustees should report actual or suspected pension scams. Trustees should report if they believe a scam has already happened, if a red flag is raised when making a transfer, or if they suspect a pension scam could be taking place (for example because an amber flag applies to a transfer). The report can be made to Action Fraud, the FCA or TPR depending on the specific concern.
PASA published updated guidance on DC governance on 20 June 2022. The original guidance was published in 2018, and the updates reflect legislative changes including a new section on the chair’s statement. The guidance is intended to provide a framework for good DC governance, specific to pension arrangement type. The document will continue to be updated in response to future changes in the DC pensions industry.
On 15 June 2022, the FRC published a consultation on proposed changes to Technical Actuarial Standard 100 which would require actuaries to have regard to material climate change and ESG risks in the course of their work. The consultation closes on 7 September 2022.
The FRC has also updated its Guidance on the Strategic Report to reflect new climate-related financial disclosures which apply to certain companies including public interest entities, large private companies and LLPs.