Pensions Weekly Update – 29 September 2021

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Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes, which you might have missed, with links for further information.

The Pensions Protection Fund (PPF) has published its consultation on the levy rules for 2022/23. The levy estimate for 2022/23 is £415 million, representing a £105 million reduction from last year's levy estimate. The PPF says that it expects 82% of schemes that pay a risk-based levy to see a reduction in their levy invoice for 2022/23. It is proposed that the small scheme adjustment of up to 50% for the smallest schemes will be retained for the next levy year and that the PPF should retain the lower risk-based levy cap of 0.25%. Consultation closes on 9 November 2021.
The Pensions Administration Standards Association-led guaranteed minimum pension (GMP) Equalisation Working Group has published new guidance on member communications, designed for schemes in the implementation stage of GMP equalisation projects – where they are preparing to start (or have already started) communicating with members and are actively working with specialists to deliver GMP equalisation. It follows on from earlier guidance published in August 2020, regarding GMP equalisation communications in the early planning stage. Later this week, we are expecting the launch of further guidance from the Working Group, this time on the interaction of anti-franking and GMP equalisation.
The government is consulting on changing the rate of fixed rate revaluation on GMPs from 3.5% per annum to 3.25% per annum for those who leave pensionable service between 6 April 2022 and 5 April 2027. For more information on fixed rate revaluation on GMPs and how some pension schemes have ended up with an unexpected underpin, please see our earlier blog. Fixed rate revaluation is generally reviewed every five years.
The Pensions Regulator (TPR) has issued a blog reminding trustees of defined contribution schemes with less than £100 million of assets that they will need to undertake a rigorous value for money assessment in line with regulations coming into force from 1 October 2021. The blog also contains links to TPR’s updated guidance.
A lot is happening on 1 October this week. New regulations will impose additional governance and reporting requirements in relation to the effects of climate-related risks and opportunities for larger occupational pension schemes and authorised master trusts. Many of the measures under the Pension Schemes Act 2021, which strengthen the powers of TPR, will come into force on Friday. Watch out for our blog, which will provide more information.
There is still time to register for our webinar on the scope of duty and economic loss, which will take place at noon on 5 October 2021. We will explore a recent Supreme Court decision and the impact on pension schemes and advisers.
Time to boogie? Have you seen our 1970’s disco-themed Autumn Hot Topics, which puts a whole new spin on current pensions issues?