What's coming up in pensions

Regulations implementing the retrospective part of the McCloud unlawful age discrimination remedy came into force on 1 October 2023. See our November newsletter for more detail. Since then, the Local Government Association has also released a guide for LGPS administering authorities on how underpin protection works. Further tweaks and clarifications to correct minor errors and omissions have also been made to the legislation, including by regulations in respect of Judicial Pensions and Police and Firefighters’ Pensions, to ensure that the remedy can be delivered correctly.

In response to Covid-19, legislation was created to allow NHS staff to return to (or increase their) work without negative effect on their pensions.

Further changes designed to help retain experienced NHS clinicians and remove barriers to returning to work from retirement (introducing partial retirement flexibilities and pensionable re-employment, among other things) came into force from 1 April, with more to come on 1 October this year: see the DHSC’s consultation response.

In addition, on 3 May, a new consultation was issued, on changes to the NHS Pension Scheme Regulations 2015 concerning uplifts to member contributions in 2023/24 in line with the ‘Agenda for Change’ pay award.

• Fair Deal: A long-awaited response to the 2019 consultation on changes to the “Fair Deal” confirmed that the Government is reconsidering its approach, and that a new consultation is expected.

• Exit Payments: The response to an August consultation on Public Sector Exit Payments and Severance Payment guidance (in respect of Central Government) remains awaited. In contrast, a further consultation on the reform of local government exit pay is now required (following the 2020 consultation).

• Boycotts, divestment and sanctions: Following the late addition to the PSPJOA on ‘investment decisions’, a Bill is expected in 2023.

No timescales have been given.

• Investment: In December, the Government announced a set of reforms intended to "drive growth and competitiveness in the financial services sector". The proposals include a consultation on guidance on asset pooling for the LGPS, and on requiring LGPS funds to ensure they consider investment opportunities in illiquid assets (such as venture and growth capital) “as part of a diversified investment strategy". This is expected in early 2023.

• Climate change: We await the coming into force of regulations (due by April 2023) implementing proposals on governance and reporting of climate change risks for the LGPS. These aim to ensure that climate change risks and opportunities are incorporated in an administering authority’s decision making process, and that they report on these annually, in line with the recommendations of the Taskforce on Climate-related Financial Disclosures. The first reports are likely to be required by December 2024.

• Good Governance Review: A consultation is expected in 2023. Proposals are likely to include more formal training requirements for pension committee members, the streamlining of the annual report document (with funds reporting on performance against their various strategies), development of standard administrative KPIs to allow performance comparisons between funds, and a requirement for funds to have a workforce strategy.

• Survivor benefits: A consultation on survivor benefits is expected in March 2023, addressing issues raised in the Goodwin discrimination case and proposing the removal of the upper age limit for paying death grants.

• SAB cost management process: On 31 January, the Government opened a consultation seeking views on proposals to make minor technical amendments to the rules of the LGPS in relation to the Scheme Advisory Board (SAB) cost management process. The consultation closes on 24 March 2023.

• TPR’s new ‘General code’ is expected imminently. Speak to us about the steps you need to take and how we can help.
• Pensions Dashboards: be prepared. While the DWP has announced a ‘reset’ of the Dashboards timeline (and so a staging date of 30 September 2024 for all public service pension schemes is no longer confirmed), schemes should still continue to prepare for connection. The PDP has produced FAQs on the revised timeline, TPR's guidance (including its ‘preparing to connect’ checklist) has been updated, and PASA has issued new advice including on ‘what to say to savers’. A ‘connection guide’ for the LGPS is remains awaited.
• Transfers: The Pension Scams Industry Group’s new interim practitioner guide helps schemes apply 2021 regulations on protecting members from scams. PSIG’s code itself will be updated once the regulations have been, following the DWP’s imminent review. Make sure you are aware of our recommended actions in light of the new publication.