Pensions - key issues for your trustee agenda January 2023

Get up to speed on dashboards. The Pensions Regulator (TPR) continues to urge schemes to make sure they’re ready as staging dates move closer – and notes that it will take “a dim view of wilful or reckless non-compliance.” TPR’s guidance provides useful checklists.

In the past few weeks there has been a flurry of activity: the Dashboard regulations came into force, alongside DWP guidance on deferring connection; revised PDP ‘Standards’ have been published, and TPR is currently consulting on its compliance and enforcement policy in relation to dashboard-duties breaches.

consultation on its draft DB funding code was published in December, alongside revisions to its proposed ‘Fast Track’ mechanism and regulatory approach. The new regime is expected to come into force with effect from 1 October 2023, for valuations falling from that date.

DB schemes’ funding and investment strategies will be expected to have a long-term objective for providing scheme benefits. Schemes should start to consider how the new requirements will impact their current funding approach.

Autumn saw pensions making headlines as the Bank of England stepped in with measures to support market functioning, including gilt purchases, following the September mini-budget. While the industry stressed that members’ pensions remained safe, schemes were urged to take steps to review and manage risk going forwards.

TPR has since issued a guidance statement calling on schemes to maintain resilience and governance in leveraged arrangements, and setting out practical steps trustees should take. It plans to issue an update in its April 2023 Annual Funding Statement, with further guidance as necessary.

Trustees have been used to sending a statement to the Competition and Markets Authority (CMA) by early January each year, confirming their compliance with requirements in relation to investment consultants and fiduciary managers.

From 1 October 2022, TPR took over compliance monitoring from the CMA and published revised guidance for schemes. Reporting to TPR is expected to have to be made via the scheme return – although TPR’s recently-published sample scheme return for 2023 with updated questions (including requiring greater detail from schemes on asset class splits, for example) did not include reference to this.