UK Pensions Newsletter

Contents

• Our recent pensions and ESG webinar 
• Ukraine: Pensions Regulator guidance 
• Pension dashboards: action for trustees to take now
• "Stronger nudge" to pensions guidance: what trustees should know 
• Other news items 

Our recent ESG and pensions webinar

Our pensions webinar on 2 March 2022 (viewable on demand) covered: 

• TCFD and pensions: what the law requires
• Box ticking or meaningful exercise? Ensuring climate-related activity results in value for your scheme 
• Minding the gaps: practical approaches to incomplete data and other challenges 
• Climate change and the employer covenant: what is needed

Click here to view our 2022 seminar programme, which includes pre-registration links for each upcoming event. 

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Pension Regulator guidance on conflict in Ukraine 

The Regulator has issued guidance for pension trustees on the immediate impact of the conflict in Ukraine.  In particular:

• Schemes wishing to disinvest from Russian assets may face significant practical and regulatory challenges in doing so;
• Defined benefit (DB) schemes should consider their short term cash flow needs and how these might be affected by margin calls;
• DB scheme sponsors may be affected by sanctions, supply chain issues or wider macroeconomic factors such as increased fuel costs, all of which may impact the employer covenant;
• With heightened risk of cyberattack and scamming attempts, trustees should consider the adequacy of their current cyber protection;
• Trustees should be vigilant and speak to their advisers about any action they may need to take.

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Pensions dashboards are coming: action for occupational pension schemes to take now 

Establishing a system of “pension dashboards” to enable individuals who have yet to take retirement benefits to find clear, standardised information about all their pension arrangements (including rights to state pension) in one place is a key element of the government’s pension strategy.

The ambition is laudable but achieving it will be a mammoth task, requiring significant time and resource from occupational pension scheme trustees, pension managers and administrators. All UK occupational pension schemes with 100 or more non-pensioner members must participate and must comply with stringent information and technical requirements.  Pension scheme trustees should consider now what action they will need to take to ensure that they are ready to meet the new obligations.

Read more.

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"Stronger nudge" to pension guidance: what trustees should know

1 June 2022 will see new requirements for trustees to give members a “stronger nudge” to take “appropriate pension guidance” (APG) before the member starts drawing flexible benefits or transfers flexible benefits. “Flexible benefits” are broadly, money purchase or cash balance benefits.

Where the requirements apply, trustees must offer to book an APG appointment for the member.  The trustees must not proceed with the member’s application to transfer or draw benefits until the member either: 

• Confirms that they have received APG; or
• Opts out of taking APG by giving an “opt-out notification”.  

Defined benefit (DB) schemes will be caught by the stronger nudge requirement in relation to any defined contribution (DC) additional voluntary contributions (AVCs).

The stronger nudge requirements are in addition to (and separate from) the scam protection checks which trustees must carry out from 30 November 2021 before processing a member’s transfer application. 

Unfortunately, the drafting of the legislation makes what is a well-intentioned requirement to protect members likely to be unnecessarily complicated in practice.  Our new briefing note explains the new requirements and sets out practical steps trustees (and their administrators) should be taking to ensure compliance.

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Other news

• The PLSA has issued its 2022 stewardship and voting guidelines.
• On climate change governance and reporting, the Pensions Regulator has published an illustrative example showing how trustees might approach the new TCFD requirements. 
• The First-tier Tribunal has held that an employer did not have a reasonable excuse for failing to pay auto-enrolment contributions in respect of furloughed staff from 1 August 2020. Paying auto-enrolment contributions was not an optional duty which could be ignored in times of financial difficulty. 

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