Pensions: what's new this week - July 22, 2024

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’. This will cover a number of previously proposed measures, including the automatic consolidation of deferred DC small pots, the introduction of a standardised value-for-money test for DC schemes and the framework for commercial DB consolidators (superfunds).

The Bill will also introduce new duties for trustees of occupational pension schemes to offer decumulation options (‘a retirement income solution or range of solutions’), including default investment options, to their members. These are referred to in the background briefing paper as ‘Guided Retirement Products’ and are expected to achieve the twin objectives of improving outcomes for members and supporting more funds being invested for longer, increasing the potential for investment in productive assets.

The Bill will also be used to reaffirm that the Pensions Ombudsman (TPO) is a ‘competent court’, removing the need for pension schemes to apply to the County Court to enforce the recovery of an overpayment following a TPO decision. The government estimates that the recent court ruling that TPO is not a competent court in overpayment cases affects around 3,000 cases a year, with additional costs of around GBP2 million.

Topics not covered in the Bill include the ideas canvassed following last year’s Mansion House speech for changes to the rules on the use of DB surpluses and the introduction of a public sector consolidator. The consultation on these issues closed in April 2024 and no response was issued by the last government. The new government included plans for a wider pensions review in its election manifesto.

Separately, the government will bring forward a Bill to establish a National Wealth Fund, which is intended to support the mobilisation of private investment to deliver growth and a greener economy.

Read the background briefing paper

Sustainability and pension fund investing - link to webinar recording

On 10 July A&O Shearman colleagues from the U.S., EU and UK came together for a fascinating discussion of the latest drivers, challenges and future expectations around sustainability and pension fund investing in different jurisdictions. For anyone who was unable to join us live, a link to the webinar is below.

Watch the webinar