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 speech on delivering investment returns for pension savers
- Venture Capital Investment Compact launched
- Economic Crime and Corporate Transparency Act receives Royal Assent
- PASA publishes new white paper on digitalisation of pension schemes
- PPF publishes blog on public sector consolidator proposals
- FCA publishes feedback statement on FSCS protection for long-term asset funds (“LTAFs”)
- TPO dismisses complaint that inability to access online pension account prevented member from taking advantage of investment opportunities
On 25 October 2023, TPR published a speech on investment and value given by Nausicaa Delfas, the Chief Executive of TPR, to the Mansion House Pensions Summit. The speech discusses value for money, diversification and TPR’s regulatory approach, setting out TPR’s expectations. It also sets out forthcoming developments, including that TPR will:
- publish new guidance on investing in private markets “by the end of the year”
- update its existing investment guidance for DB and DC schemes “in due course”
- clarify in the new DB funding code that “all schemes can invest in growth assets, with much greater flexibility for open schemes and those further away from their end game”
- launch a new digital and data strategy, and
- work with the industry to develop “safe consolidation solutions”.
Several UK venture capital and growth equity fund managers have agreed the “Venture Capital Investment Compact”, committing to develop a “long-term and constructive working relationship with UK pension investors”. The firms will work with pension providers over the next 12 months to October 2024 to “increase UK pension scheme investment into venture, growth and other private capital funds as part of a diversified portfolio”, building on the Mansion House compact where certain pension providers voluntarily agreed to invest 5% of DC scheme default fund assets in private equity and early-stage business by 2030.
The Economic Crime and Corporate Transparency Act received Royal Assent on 26 October 2023. Among other changes, the Act will introduce reforms to the UK’s corporate registration framework. This includes new requirements for directors, persons with significant control, and most individuals who file documents with Companies House to verify their identity. The timeframe for the new identity verification measures coming into force is not clear, but they will require new secondary legislation and guidance, as well as system development.
On 30 October 2023, PASA published a paper to “set the scene” on the digitalisation of processes for recordkeeping, data management and overall pension scheme administration, and reasons why there may be a reluctance to digitise. The paper is part of a series of releases planned for the coming months on digitalisation, which will offer “guidance and recommendations on the best way to approach transformation”.
On 25 October 2023, the PPF published a blog on the challenge of potentially onboarding a large number of schemes into a public sector consolidator, following the DWP’s call for evidence on options for DB schemes. The blog comments that the PPF has the “capability and experience to assume a new public sector consolidator role”, though this would require setting up a separate and independent legal entity from the PPF. It considers that the design of any consolidator, which would require new legislation, would be crucial to its success, in particular the transfer process which “could be quite different” from the existing PPF transfer process.
On 30 October 2023, the FCA published a feedback statement on its proposal to exclude FSCS cover for regulated activities related to LTAFs. In light of the feedback received, the FCA decided not to take forward the proposal but intends to consider changes to the scope of FSCS protection for retail investments “in the round”.
TPO dismisses complaint that inability to access online pension account prevented member from taking advantage of investment opportunities
TPO dismissed a complaint from a member that his inability to access his online pension account for several months prevented him from taking advantage of the investment opportunities that arose during the pandemic. TPO noted that being unable to register for an online account would have caused Mr R some inconvenience but considered that with reasonable diligence Mr R could have made his desired investment decisions via other means. While schemes should not be complacent about the availability of their online services, this decision is a useful reminder that members must take steps to mitigate their potential losses. See our case summary for details.