Welcome to your weekly update from the A&O Shearman Pensions team, covering all the latest legal and regulatory developments in the world of workplace pensions.
TPR commitments to support growth
The Pensions Regulator (TPR) has written to the government setting out how it will support the economic growth agenda and improve outcomes for savers. This comes in response to last month’s government policy paper on the subject. The letter sets out commitments (building on the TPR pledges listed in the policy paper) which TPR will implement over the next year, including:
- Guidance will be published to help DB schemes understand a wider number of alternative models for provision (for example, running on rather than buying out) which, TPR believes, are more likely to encourage productive investment.
- TPR will develop a strategy to raise standards of trusteeship to ensure that all trustees are capable of considering a diversified range of investments. It will also ‘extend [its] supervisory grip over wider actors in the pensions ecosystem who have an influence on outcomes including professional trustee firms’—see below on TPR’s plans to expand its supervision of professional trustees.
- It will review all regulatory interventions—including existing legislation and regulations—to identify any that do not drive material benefits, and will reduce burdens through streamlining data collection requirements.
- There will be a review of master trust regulatory capital reserve requirements.
- TPR will design a system for actively analysing data provided through the upcoming Value for Money framework (VFMF) to allow it to set its expectations and supervisory approach towards driving growth. The VFMF will help TPR’s commitment to supporting consolidation of schemes.
TPR notes that there are several instances where legislative duties, particularly those prescribing provision of information or requiring TPR to issue a penalty (for example the requirement to issue a fine for failure to publish a chair’s statement), have become outdated and now constrain its ability to reduce burdens. It has asked the government to commit to considering amending that legislation and giving TPR a delegated rule-making power.
Read the letter.
Read Nausicaa Delfas’ speech discussing the policies.
TPR to extend supervision of professional trustee firms
TPR has announced that it is extending its oversight of professional trustee (PT) firms. It will begin targeted engagement with larger PT firms in the summer, extending its approach to cover remaining firms by the end of the year. TPR will then set out its expectations and work with the PT industry to identify appropriate mitigations to identified risks. Where it identifies material risks and firms do not meet its expectations, TPR will consider using its powers to mitigate those risks.
TPR has identified a number of areas of focus for engagement, including: how PTs manage relationships with employers; whether PT profit and remuneration models could affect decision-making; considerations around appointment of sole trustees and internal controls operated by these trustees; whether there is a risk that the presence of in-house advisers could lead to compromised decision-making or compromised advice to schemes; and whether decision-makers have sufficient knowledge and understanding and use appropriate internal controls and delegation. TPR has urged anyone with information or experience of the PT market and any risks to contact it.
Read TPR’s press release.
Read TPR’s market oversight report.
PPF publishes strategic plan
The Pension Protection Fund (PPF) has published its strategy for 2025–2028. The strategy restates the PPF’s intention to work with the government to reduce costs for schemes and employers by: (a) creating a framework that allows for a zero levy but enables the levy to be reintroduced if necessary; and (b) considering changes to the industry-funded PPF administration levy in line with the recommendation that this should be abolished. It also sets out a goal of working with TPR and DWP to investigate the best way to ‘manage DB pension schemes unlikely to make it to buy-out, in a way that maximises the benefit to savers’.
Read the strategic plan and business plan.
ICO publishes new guidance on anonymisation
The Information Commissioner’s Office (ICO) has published new guidance on anonymisation and pseudonymisation of data. The guidance includes sections on how to ensure anonymisation is effective, what accountability and governance measures are needed, and case studies. Compliance with the guidance is not compulsory but if the ICO needs to investigate an issue involving anonymisation it will take the guidance into account. Schemes should ensure that if they or their administrators are using anonymised data (for example when running analysis on members), they consider the guidance.
Read the guidance.
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