Key issues for your trustee agenda

Jan-25

We recommend prioritising these issues on your new year agenda:

Pension dashboards

With connection dates now heading fast towards us, ensure your dashboards preparation is on track. As TPR warns, trustees are ultimately accountable for dashboard compliance, and must not simply assume that other parties have everything in hand. Schemes should have robust governance in place to track progress, manage risks, and ensure data quality.
Are you up to date with recent publications? TPR released refreshed dashboards guidance, with some significant updates and clarified expectations, in mid-December; the PDP issued updates to its data standards, reporting standards and code of connection in November; and additional PASA guidance was shared.
TPR reminds schemes that they need to be alert to developments as they happen, and to liaise regularly with relevant third parties. TPR’s recent ‘hot topic’ publication covers how trustees should be working with advisers, providers and administrators to meet their duties. Further TPR articles, and design standards, are expected early in 2025.

Governance

TPR notes that it is good governance to have a documented policy on surplus extraction appropriate to the context of the individual scheme, including details of how members and the employer are likely to benefit from any release, and what the sign-off processes should be
Trustees should take advice on the risks and opportunities that running on presents, including covenant advice
Trustee boards should (as ever) be cognisant of the potential for conflicts of interest, particularly where trustees are also senior stakeholders in the scheme employer
TPR mentions that where surplus may be used to fund the employer’s DC payments, trustees should ensure there are adequate skills, knowledge and understanding to ensure that the DC scheme is also well governed
TPR also remarks that a scheme that is overfunded for a long period may indicate ‘poor governance controls’.

Pensions policy

Announcements made at the October 2024 Budget and November Mansion House Speech are likely to see schemes undertaking work in 2025.
The industry looks forward to clarity on aspects of the Inheritance Tax on Pensions consultation (to which TLT is responding). Speak to us for actions trustees and employers should be taking in light of the announcement, to ensure your scheme, administrators and members are all prepared.
Increases to employer NICs at the Budget may also mean that some schemes are contemplating changes to their contribution rates and salary sacrifice offerings. If this is relevant to you, take advice, and remember to undertake consultation with members as required.
DC schemes large to small may be considering consolidation as the push towards value increases in 2025. Speak to us to see how our expertise could help you.

DB funding

Familiarise yourself with TPR’s new draft DB funding code which was laid in Parliament at the end of July and aligns more closely with the new funding regulations). TPR’s Response sets out key differences from the original draft.
The new DB funding and investment regime broadly takes effect for valuations from 22 September 2024 onwards, but the code will not come into force until later in the autumn. TPR will communicate with schemes affected by this gap, and will ‘take a reasonable regulatory approach to them.’
Identify when the new requirements will apply to your scheme, and consider what your funding and investment strategy will look like, taking legal, actuarial and covenant advice where relevant.
Watch out for further publications: TPR’s guidance on and a finalised template for the statement of strategy, guidance on TPR’s regulatory approach with further detail on its ‘twin-track’ approach, and revised employer covenant guidance are all still awaited.

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