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 publishes latest annual funding statement

TPR’s latest annual funding statement was published on 24 April 2024. The statement is primarily aimed at schemes with valuation dates between 22 September 2023 and 21 September 2024, but is also relevant to schemes which are reviewing their funding and investment strategies (for example due to changes in market conditions).

The majority of schemes are estimated to have improved funding positions, and in light of the Mansion House reforms announced since the last statement, TPR encourages DB trustees and employers to use this “step change in position” as an opportunity “to reassess their long-term targets and consider run-on, consolidator or insurance options”.

With new legislation and a revised DB code on the horizon, expected to apply to valuations with effective dates from 22 September 2024 onwards, it “would be good practice for trustees to consider the steps they can take now to align (even if broadly) with the funding code when it is published”, so as to avoid having to make significant changes at the next valuation.

See our Alert for more details and a recap of the timetable for the new DB funding regime.

Pensions dashboards updates

On 29 April 2024, the PDP published its ninth progress update report, covering its work to deliver the dashboards ecosystem. It confirms that an updated draft of data standards for pensions dashboards will be published on the PDP’s website “soon”, while work continues on the updated versions of the other standards.  The PDP is also preparing guidance on connection, and will set up an online connection hub, including the code of connection, which it expects to publish later in 2024.  For trustees who are connecting via a third party, there will be guidance on the connection hub to explain when and how they should contact the PDP regarding their connection plans.

The FCA has made a modification to its dashboard rules for pension providers to provide an easement enabling firms to connect to the dashboards digital architecture ahead of the statutory deadline of 31 October 2026, in line with the DWP’s connection guidance, even if they are unable to comply with the relevant COBS rules in respect of all of their member data at the point of connection. The FCA acknowledged that the unmodified rules may have deterred firms from connecting by the dates in the DWP’s guidance.

HMRC’s pension schemes newsletter 159

Further guidance on the LTA removal has been published in HMRC’s newsletter 159. Alongside the newsletter, HMRC has published a consolidated and updated version of its FAQs, including those from previous newsletters.

The second set of regulations to address issues in the legislation enacting the tax changes that took effect from 6 April 2024 were expected to be laid before Parliament this month, but have not yet appeared.

TPR publishes blog on DB innovation

On 25 April 2024, TPR published a blog on supporting innovation in savers’ interests, setting out its expectations that new DB models “must offer both clear benefits and proper protections”. TPR is “pleased” that the superfund market has gained traction in the past few months, and hopes to see “an emerging competitive superfunds market that offers enhanced security for savers”.

Guidance on the profit release mechanism in superfunds is expected “shortly”, following the updated superfunds guidance published last year. New guidance on DB alternative arrangements to help trustees and employers navigate alternative arrangements is also scheduled for this year.

TPR continues to expect trustees considering transferring savers into a new type of scheme to engage with its market oversight team.

FCA publishes anti-greenwashing guidance

On 23 April 2024, the FCA published guidance to help firms meet the requirements of the “anti-greenwashing” rule that will come into force on 31 May 2024. The rule will apply to all FCA-authorised firms and is intended to “protect consumers by ensuring sustainable products and services they are sold are accurately described”.

The wider labelling and sustainability disclosure requirements will begin to apply to certain investment products from 31 July 2024. These rules will not initially apply to pension products, but the FCA will consider extending the regime to include such products in the “medium term”, working with the DWP and TPR.

MaPS reports feedback on pensions guidance services

On 24 April 2024, MaPS published analysis of feedback on its pensions guidance services during April 2023 to March 2024, with:

  • 71% of people reporting that they felt more confident in spotting and managing a potential financial scam after having a pensions guidance call through MoneyHelper
  • 83% of people who used MaPS’ pensions guidance service feeling more in control of their financial situation.