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Plus – what to keep an eye on, and what to look out for in the coming weeks.
Pensions Trustee Agenda May 2023
With major cyber breaches hitting the headlines in recent weeks, schemes should ensure their systems, procedures and documentation in this area are up to date and kept under review. Schemes immediately affected by any breach should take advice on their notification obligations and mitigation actions.
As TPR has noted, it is a question of not ‘if,’ but ‘when’ an attack might be made, with pensions being a particularly lucrative area for cybercriminals. In the case of a recent breach, TPR wrote to affected schemes, asking what steps they had taken to ensure that their obligations as data controllers had been met, with a short turnaround time. Schemes must ensure their cyber security policies, service level agreements with third parties, and business continuity and incident response plans are robust, tested, and well-documented.
ACTION: Take regular training on this fast-moving area, and make cyber risk a standing agenda item. TPR’s current guidance on cyber security principles is also due to be updated and strengthened in the forthcoming General Code.
TPR has launched a number of key campaigns over recent weeks, including on:
ACTION: Schemes should make sure they are aware of their obligations and TPR’s recommendations and expectations in the above areas, and work with their advisers to ensure they are up to scratch. TPR’s publications contain useful reminders — and clear warnings.
TPR has now confirmed that its DB funding code and regulatory framework won’t be launched until April 2024 (and will apply to valuations falling from that date). Watch out for publication of the final code, and finalised DWP regulations – with changes likely from the draft versions. Schemes may still wish to consider how the general direction of travel would impact their current funding approach.
Its new Annual Funding Statement encourages trustees to consider their funding and investment strategies, and to lock in any gains they may have made over recent months. Where a scheme has seen less improvement, trustees need to understand why and review their strategy accordingly. On 10 May, TPR also published refreshed guidance for trustees dealing with sponsoring employer distress, urging them to remain vigilant to economic challenges, undertake appropriate covenant monitoring, and engage with the Regulator where necessary.
ACTION: Schemes and providers should familiarise themselves with TPR’s Statement and guidance with appropriate support from third parties, and watch out for further DB developments.
11 May 2023