Pensions Weekly Update – 22 December 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 Pension Protection Fund (PPF) has published its final levy rules for 2022-23. The PPF has confirmed that it will leave in place key support measures introduced in 2021, including the lower risk-based levy cap (meaning that no scheme will pay more than 0.25% of its liabilities as a levy) and the small scheme adjustment, which will halve the levy for schemes with under £20 million of liabilities. The levy estimate has been reduced down from £415 million at the consultation stage to £390 million. The key date for submission of documents, including the scheme return and contingent asset certificates, remains midnight on 31 March 2022. Documents that would normally be submitted in hard copy, such as the guarantor strength certificate, should be emailed to the PPF before 5 p.m. on 1 April 2022.
The PPF has confirmed that it will not be imposing a six-year time limit on arrears of payments owed to PPF and Financial Assistance Scheme pensioners as a result of recent court decisions (see our weekly update of 8 December 2021 for more information). The PPF expects it will take until the end of 2022 to complete making the arrears of payments.
The DWP has issued its outcome of consultation on draft regulations for collective money purchase schemes (CMPs). The outcome confirms that CMPs are only intended to be established by single or connected employers at this stage. A single application fee has been set at £77,000. The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 were laid before Parliament on 16 December 2021 and are due to come into force on 1 August 2022. The final draft of the Occupational Pension Schemes (Collective Money Purchase Schemes) (Modifications and Consequential and Miscellaneous Amendments) Regulations 2022 have also been published with an effective date of 1 August 2022.
The government has launched its second state pension age review, which is a requirement under the Pensions Act 2014. The purpose of the review is to consider whether the rules around pensionable age remain appropriate in light of latest life expectancy data and other evidence. The review must be published by 7 May 2023.
The Pensions Regulator (TPR) has published its final form guidance on governance and reporting of climate-related risks and opportunities. This is aimed at those trustees who are required to comply with the provisions of the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 (TCFD Regulations). Trustees of other schemes, which are not currently in scope of the TCFD Regulations, are encouraged to follow the guidance where appropriate. TPR has also updated its monetary penalties policy to include a new appendix 3 setting out its approach to penalties for non-compliance with the TCFD Regulations.
The Financial Conduct Authority (FCA) has published two policy statements confirming final rules and guidance to promote better climate-related financial disclosures. Policy statement PS21-23 requires issuers of certain shares to include a statement in their annual financial reports setting out whether their disclosures meet the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) and, if not, to explain why. Policy statement PS21-24 requires FCA-regulated asset managers and owners, including life insurers and pension providers, to disclose how they take into account climate-related risks and opportunities when making investment decisions. The policy statements come into force from 1 January 2022 and should assist pension trustees in complying their own TCFD requirements.
There is still time to enter our festive pensions quiz, which has a different format this year. The closing date for entries is 22 December 2021.

We would like to wish all of our colleagues and contacts a peaceful and safe holiday period and look forward to meeting up with you (in person or virtually) in 2022.

If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.