DC governance

DC governance

STOP PRESS: On 28 March 2024, the Pensions Regulator (TPR)’s new General Code of Practice came into force, through the Pensions Act 2004 (General Code of Practice) (Appointed Day, Amendment and Revocations) Order 2024, SI 2024/431. The General Code merges and updates ten of TPR’s existing codes of practice into a single code made of ‘51 shorter, topic-based modules’. TPR say this new format will make it easier for governing bodies to find TPR’s expectations and certify whether they meet them. The ten codes of practice affected are those relating to reporting breaches of the law, early leavers, late payment of contributions, trustee knowledge and understanding, MNTs/MNDs, internal controls, dispute resolution—reasonable periods, DC governance and public sector governance. For further information, see LNB News 27/03/2024 1 and News Analysis: Pensions Regulator publishes new governance standards for pension schemes.

Development of the DC landscape

With the increasing burden that final salary pension schemes have had on employers, and the introduction of the catalyst that is automatic enrolment, a dramatic rise in defined contribution (DC) pension schemes was somewhat inevitable. With DC now firmly under the spotlight,

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Latest Pensions News

PLSA responds to FRC's UK Stewardship Code Consultation

The Pensions and Lifetime Savings Association (PLSA) has submitted a response to the Financial Reporting Council's (FRC) consultation on proposed revisions to the UK Stewardship Code. While welcoming efforts to streamline reporting requirements, the PLSA expresses concerns about the proposed new definition of stewardship, which omits explicit references to 'environment' and 'society'. The PLSA argues that this change risks diluting stewardship standards at a time when environmental and social considerations are increasingly important. The PLSA emphasises the voluntary nature of the Code and its role as a beacon of best practice, urging the FRC to maintain robust stewardship standards in line with the government's commitment to sustainable finance and the green transition.

TPR improves oversight of largest DC schemes to enhance member outcomes

The Pensions Regulator (TPR) has announced improvements in its supervision of master trusts and defined contribution (DC) schemes, following a 12-month review. TPR’s new approach splits schemes into four segments of supervision with tailored levels of engagement, aiming to identify risks sooner and improve saver outcomes. These segments include, monoline, commercial and non-commercial master trusts, collective DC schemes as well as single and connected employer DC schemes. TPR’s key focuses include ensuring that all savers receive value for money and establishing clear priorities around investments, data quality, and innovation at retirement. For larger schemes, dedicated multi-disciplinary teams will be assigned, facilitating more targeted, expert-level interactions. This shift represents a move towards a more prudential regulatory style, addressing both scheme-specific and market-wide risks in the UK pensions landscape.

Pensions weekly highlights—20 February 2025

This week's edition of Pensions weekly highlights includes a review of key news stories, as well as dates for your diary and trackers.

HM Treasury confirms first top-up payments for tax year 2024-25

HM Treasury has confirmed the implementation of legislation introduced in 2023 to address the disparity in tax relief between relief at source and net pay workplace pension schemes for low-paid workers. The policy aims to provide approximately one million individuals in net pay schemes with an annual top-up payment of around £70, ensuring similar outcomes regardless of the pension scheme type. HM Revenue and Customs (HMRC) is currently developing an IT solution to identify eligible individuals and facilitate these payments. The initiative will commence with the 2024-25 tax year, with the first payments expected to be offered to eligible individuals in 2026.