Issues affecting all schemes
ESG – compliance review findings
The Pensions Regulator (TPR) has published the findings from its review of how trustees are complying with their wider ESG duties. The review concludes that while 99% of trustees of in-scope schemes provided weblinks to relevant ESG disclosures, too many smaller schemes opted for minimum compliance in relation to the content of those disclosures. TPR's recommendations include trustees:
- Dedicating sufficient time and resources to preparing their statement of investment principles (SIP) and implementation statement.
- Taking proportionate and appropriate actions to mitigate risks.
- Taking ownership of ESG activities.
- Where schemes are invested in pooled funds, reviewing fund manager policies on ESG-related issues.
- Providing more detail on policy to show they are considering specific ESG-related risks relevant to their scheme.
- Providing more scheme-specific detail on voting activity.
- Providing more detail on asset management arrangements.
- Considering going beyond climate change reporting.
Action
Trustees should take account of the review's recommendations when next updating their SIP or preparing their next implementation statement.
King's Speech – pensions content
The King's Speech announced that a Pension Schemes Bill will be laid before Parliament. The Bill will provide for:
- A system for the automatic consolidation of small deferred DC pots.
- A new value for money framework for DC schemes.
- A requirement for DC occupational pension schemes to offer a retirement income solution or range of retirement income solutions.
- Establishment of commercial DB superfunds.
- The Pensions Ombudsman to be a "competent" court for the purposes of making orders in relation to recoupment of overpayments.
Action
Trustees, employers and administrators should monitor the Bill's progress through Parliament.
Pensions review – launch of first stage
The government has announced the launch of the pensions review that was promised in Labour's election manifesto. The review is intended to:
- Boost investment.
- Increase pension pots.
- Tackle waste in the pensions system.
The first phase of the review will focus on identifying any further actions to drive investment that could be taken forward in the Pension Schemes Bill. The subsequent phase, to start later this year, will consider further steps to improve pension outcomes and increase investment in UK markets, including assessing retirement adequacy.
Action
Trustees, employers and administrators should monitor the progress of the review.
Digital administration – white paper
The Pensions Administration Standards Association has published a white paper on the current status of digital administration. The paper looks at:
- The current position in 2024.
- How the industry reached this position.
- Where the industry should go next in terms of automation and transformation of digital administration into the future.
Action
No action required.
To view the full article, click here.
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