Pensions: Joint DB & DC trustee agenda update for August 2024 meetings

King’s Speech: new Pension Schemes Bill announced

Among the 40 new Bills announced in the King’s Speech is a Pension Schemes Bill designed to ‘strengthen… pension investment’ (read more).

This will cover a number of previously proposed measures, including the automatic consolidation of deferred DC small pots, the introduction of a standardized value-for-money test for DC schemes and the framework for commercial DB consolidators (superfunds). It will also introduce new duties for trustees to offer decumulation options, including default investment options, to their members.

The Bill will also remove the need for pension schemes to apply to the County Court to enforce the recovery of an overpayment following a TPO decision.

ACTION: Maintain a watching brief as the Bill progresses and arrange training as appropriate.

TPR: annual funding statement

In its annual funding statement, the Pensions Regulator (TPR) urged all trustees to review their funding and investment strategies following potentially significant changes due to market conditions over the last two years (read more). 

The statement also noted that trustees may be asked, in the light of improved funding, to allow employers to reduce or suspend contributions, or to provide members with discretionary increases, and listed a series of factors for trustees to consider in relation to such requests.

ACTION: Read the annual funding statement and consider how TPR’s commentary applies to your scheme.

Changes to Ombudsman processes

The Pensions Ombudsman (TPO) has announced that it will no longer be possible for complainants to use its Early Resolution Service as an alternative to their scheme’s internal dispute resolution procedure. It has published an updated factsheet reflecting this change and setting out wording that can be used to signpost members to its services (read more).

ACTION: Check that TPO contact details are up to date in standard communications and make any relevant changes to wording about the early resolution service.

Watch this space

• The new DB funding framework is scheduled to apply to scheme valuations on and after September 22, 2024, but we await confirmation of when the new Code of Practice will be brought into effect.
• Further technical changes to the rules replacing the Lifetime Allowance are expected in due course, with retrospective effect. HMRC has published numerous FAQs explaining various practical and technical details of the new rules (read more).
• The government has launched a multi-phase pensions review, which will look over the next few months at actions to support greater productive investment and better retirement outcomes, including identifying any further actions to drive investment that could be included in the Pension Schemes Bill. A further phase starting later this year will consider the wider pensions landscape to strengthen security in retirement, including pension adequacy (read more).
• There is currently no date for revised regulations on changes to the notifiable events regime (read more).
• Prior to the general election, the Chair of the House of Commons Work and Pensions Committee identified key areas for potential intervention in the new Parliament, including whether TPR’s remit should be extended to cover pensions administrators and whether TPR should have direct rule-making powers to enable it to respond more quickly to emerging risks (read more).

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