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 DB funding and investment strategy
- TPR issues guidance on private market investments
- HMRC publishes further guidance on LTA abolition
- TPR announces new interim Executive Director of Frontline Regulation
On 29 January 2024, the DWP published its response to its 2022 consultation on regulations to implement new requirements set out in the PSA21 for DB schemes to have a funding and investment strategy. Alongside the response, the DWP published the final version of the regulations. Subject to parliamentary approval, the regulations are expected to come into force from April 2024 and apply to scheme valuations from September 2024.
See our forthcoming Alert for details.
On 24 January 2024, TPR published new guidance for occupational pension scheme trustees who are considering investing in private markets such as private equity, private debt, private real estate, infrastructure and natural resources. This guidance follows the Mansion House reforms, which, among other aims, are intended “to enable the financial services sector to unlock capital for UK industries and increase returns for savers while supporting growth across the wider economy”.
The guidance covers what private market assets are, opportunities and risks, legal duties, key considerations, and specific DB and DC matters to consider. It also includes links to additional resources and refers to the PLSA’s case studies on investment in illiquid assets.
Trustees are expected to ensure they have an appropriate level of knowledge and understanding to be “able to work with their advisers to fully consider how accessing private market assets may meet their needs”.
TPR considers that if trustees think “greater value could be delivered by investing in a wider range” of investments but their scheme “does not have the scale or governance to do so”, they should consider whether it would be in members’ best interests to consolidate the scheme.
In its newsletter 155 published on 25 January 2024, HMRC set out some further information and guidance on the abolition of the LTA (which is scheduled to take effect on 6 April 2024). The newsletter includes responses to some frequently asked questions and explains that legislative changes will be needed to address some specific areas, such as event reporting. HMRC is considering whether legislative change may be required to address unintended consequences in the way the new “pension commencement excess lump sum” authorised payment will operate for members with multiple pension schemes.
HMRC expects to issue newsletters every two weeks with further guidance, covering issues such as transitional provisions for members who took benefits before 6 April 2024.
Our webinar on 8 February 2024 will look at the key issues trustees and their advisers will need to address to ensure they are ready.
On 25 January 2024, TPR announced that Nicola Parish, its Executive Director of Frontline Regulation, will be leaving TPR in February after 16 years in the role.
Mel Charles, the current Director of Automatic Enrolment, will become Interim Executive Director of Frontline Regulation until TPR launches recruitment for another Board-level executive “in due course”.