Pensions

Contact: Rachael Healey

Pensions

New focus on master trust supervision by TPR

On 8 July 2024, The Pensions Regulator (TPR) announced a renewed approach to their supervision of master trusts to place greater focus on investments, data quality and standards and innovation. This approach follows greater levels of governance and administration for master trusts after a master trust authorisation and supervisory regime was implemented. As part of this new approach, TPR will engage with master trusts' investment experts and trustees, keeping a close watch on how master trusts' investments deliver on their returns.

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TPR publishes new superfunds guidance

The Pensions Regulator (TPR) has set out its expectations for capital release in Defined Benefit (DB) superfunds, which is intended to boost market innovation whilst retaining protection for scheme members. The updated superfunds guidance states that capital can be released up to twice a year, provided that the total assets (in the pension scheme and capital buffer) exceed minimum capital adequacy requirements. Previously the guidance only allowed capital to be released when benefits were bought out. The updated guidance also dispenses with the standalone test, which previously stated that a new scheme transferring to a superfund would need to satisfy capital requirements as if the new scheme was considered in isolation.

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Pensions

Regulator warns pension trustees on ESG compliance

The Pensions Regulator (TPR) has published a report highlighting the need for trustees to comply with their Environmental, Social and Governance (ESG) duties, to a minimum standard. The report is based on disclosures made by 3,500 different pension schemes and highlights trustees failing to take ownership and/or provide sufficient management of their ESG policies and activities. For trustees who delegate ESG matters to investment managers, the TPR has advocated for trustees to evidence their oversight. For trustees who lack expertise in ESG, the TPR have advised consolidating schemes in a way which could improve ESG risks for their members. Trustees who invest in pooled funds have been guided to "show active engagement and advocate for their scheme’s policies", after findings showed a lack of detail in current policies.

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Government details scope for “phase one” of pensions review

Actuaries, lawyers, administrators and investment consultants in the pensions industry all need to know about this focal development in the Pensions Review. Phase one is set to focus on:

driving scale and consolidation of defined contribution workplace schemes
tackling fragmentation and inefficiency in the Local Government Pensions Scheme (LGPS) through consolidation and improved governance
the structure of the pensions ecosystem and achieving a greater focus on value to deliver better outcomes for future pensioners, rather than cost
encouraging further pension investment into UK assets to boost growth across the country.

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TPR lays new DB funding code in parliament

The Pensions Regulator (TPR) has met a turning point as its new Defined Benefit (DB) funding code has been laid in parliament. This code sets out what TPR regards as good practice for sponsoring employers, advisors and trustees, aligning with changing regulation and the need to protect savers, whilst complying with the Funding and Investment Strategy requirements.

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