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

Action Fraud launches awareness campaign

On 20 April 2021, Action Fraud launched a new national campaign to highlight the importance of members undertaking research before making changes to their pension arrangements. Nicola Parish, TPR’s Executive Director of Frontline Regulation, reminded savers to visit impartial guidance services or seek advice from an FCA-authorised adviser, and again called on the industry to sign up to TPR’s Pledge.

According to Action Fraud figures, £1.8m has been lost to pension fraud this year.

DWP report outcome of Chair’s statement review

The DWP has reported the outcome of its statutory review of the chair’s statement (see our DC briefing). Key conclusions include:

  • The Government and TPR should consider the audience and role of the Chair’s statement in relation to scheme governance and member communication.
  • The information contained in the Chair’s statement should be revisited and further work is needed between DWP, TPR and industry representatives to ensure common agreement on content, enabling the Chair’s statement to be shorter and more focused.
  • Whilst not within the scope of the review, consideration should be given to the legislative requirement for TPR to issue mandatory fines in relation to the Chair’s statement and whether there should be an amendment to allow TPR to use discretion.

PPI publishes final report in ESG series

On 22 April 2021, the PPI published a briefing note on engaging with ESG, the final output in the PPI’s “Engaging with ESG” series of briefing notes. This note explores the way in which pension investment strategies take into account ESG factors, and considers future opportunities, challenges and proposals for encouraging evolution and improved risk mitigation.

Treasury Committee report on achieving net zero

On 22 April 2021, the Treasury Committee published a report entitled “Net-Zero and the Future of Green Finance”, which sets out recommendations for how the Government can achieve net-zero by 2050.

The report references the “high level of inertia amongst consumers around DC pension fund choice, with most remaining in the ‘default’ fund”. It notes that HMT “has been robust in its view that default funds should not be required to move to more green alternatives, but at the same time maintains that consumers should not have to switch out of the default fund to invest sustainably. The Government should resolve this apparent contradiction”. It recommends that HMT report regularly on the proportion of pension holders in DC pension schemes who remain in the default fund, and the extent to which those default funds “are aligned with a path to net-zero”.

In relation to DB schemes, it notes that a challenge lies in reaching and encouraging smaller schemes to integrate climate governance and reporting requirements, where they fall outside the scope of the regulations under the Pension Schemes Act 2021 (see our Alert).