Pensions Weekly Update – 17 July 2024

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

Background papers to the King’s Speech set out the scope of a new pensions bill to be brought forward. The document says that “a private pensions market that encourages consolidation and focuses on value and outcomes for members will not only enable security in retirement, but also enable pension schemes to invest in a wider range of assets, driving growth.” The new pensions bill will include measures to:

Prevent people from losing track of their pension pots through the automatic consolidation of defined contribution (DC) individual deferred small pension pots.
Ensure all members are saving into pension schemes delivering value through the Value for Money framework. The bill will introduce a standardised test that trust-based DC schemes will need to meet to demonstrate they deliver value. The government expects that this should result in consolidation in the pensions market by leaving a smaller number of well-performing, well governed schemes that will not only improve outcomes for savers but are likely to lead to more productive investment of funds.
Require occupational pension schemes to offer retirement products, so that people have a pension and not just a savings pot when they stop work.
Consolidate the defined benefit (DB) market through commercial superfunds.
Reaffirm The Pensions Ombudsman (TPO) as a competent court in relation to recovery of overpayments, so that trustees do not need to take the additional step of enforcing a TPO determination through the county court.
Amend the definition of “terminal illness” so far as Pension Protection Fund and Financial Assistance Scheme compensation is concerned, to allow eligible members to receive a lump sum payment at an earlier stage.

The papers also contain details of a national wealth fund bill to put it on a statutory footing and enable it to “make transformative investments across every part of the country – mobilising billions of pounds worth of additional private sector investment”.

Emma Reynolds MP will have an interesting job as the new pensions minister, having a foot in two camps that potentially have conflicting interests, so far as pensions policy is concerned. She has been appointed to the roles of both parliamentary secretary in HM Treasury and parliamentary undersecretary in the Department for Work and Pensions.
The Pensions Regulator (TPR) has published a speech by its chief executive, Nausicaa Delfas, at the Master Trust Conference. She said that there needs to be a “laser-like focus on value”, meaning a focus on investments, data quality and standards, and innovative retirement solutions. TPR says that, going forward, there will be broader engagement between TPR and master trusts, which will be led by TPR’s market oversight team. This will involve face to face meetings, as well as document disclosure requests.
The Financial Conduct Authority (FCA) has published updated listing rules. It says that the updated rules ensure investors will have the information they need to make decisions about their money, while maintaining appropriate investor protections to hold the management of companies they co-own to account. The FCA notes that the changes to the listing rules follow extensive engagement across the market. It says that the new rules involve allowing greater risk, but it believes the changes will better reflect the risk appetite the economy needs to achieve growth. The new rules come into force on 29 July 2024.
Meet Gabe Pennington, a corporate lawyer by day and Touch World Cup England captain in his spare time. We wish his team every success in the Touch World Cup 2024 which is taking place this week.