Welcome to our monthly update on current legal issues for trustees of DC pension schemes, designed to help you stay up to date with key developments between trustee meetings, and to support the legal update item on your next trustee agenda. We have a separate update for DB/hybrid schemes.

General Code ‘go live’ date: 27 March 2024 NEW

The new General Code, which replaces ten current codes of practice, is due to come into effect on 27 March. The message from the Pensions Regulator (TPR) is that this is ‘an opportunity for governing bodies to make sure their schemes meet the standards of governance we expect.’

Schemes will need to ensure that they have all the elements of an ‘effective system of governance’ (ESOG) in place, and in due course will need to carry out an ‘own risk assessment’ (ORA) of how well the ESOG is working (read more).

ACTION: Review the Code and take action to address any gaps; identify the ORA deadline applicable to your scheme.

Recovering overpayments: TPO update NEW

Scheme processes for recovering overpayments will have to change following a recent court ruling that the Pensions Ombudsman (TPO) is not a ‘competent court’. Schemes that have a TPO determination in their favour will now require an order from the county court before they start recouping money in instalments from ongoing pensions. TPO has issued a statement providing practical details about the process (read more).

ACTION: Update scheme processes; contact your usual adviser for further support.

Preparing for the abolition of the LTA NEW

HMRC has published guidance on the abolition of the lifetime allowance from 6 April. Further guidance and final regulations are due shortly (read more).

ACTION: Once the regulations are in final form, scheme rule updates are likely to be required to ensure correct operation from 6 April 2024.

Autumn Statement

The Chancellor made a number of pensions-related announcements in his Autumn Statement and supporting documents (read more), with potentially significant long-term impacts for the industry.

The documents published included responses to consultations on: (i) DC decumulation, confirming that occupational schemes will be required to provide decumulation services; (ii) deferred small pots, with the government pursuing a multiple default consolidator approach; and (iii) trustee effectiveness, with no immediate proposals for legislation. A call for evidence was published on giving individuals a right to require a new employer to contribute to an existing pension pot – a ‘pot for life’, and on a potentially expanded role for Collective DC (CDC) schemes in future.

ACTION: Review/ask for training on the announcements.

TPR updates cybersecurity guidance

TPR has updated its guidance on cybersecurity, setting out practical steps for schemes to take to meet its expectations in the forthcoming General Code. In particular, TPR is now requesting that trustees report significant scheme-specific cyber incidents to it as soon as reasonably practicable, to help it build a better picture of the cyber risk facing the industry and its members. The guidance includes sections on key controls and incident response planning (read more).

ACTION: Review the guidance against your scheme’s current policy and procedures.

PASA guidance: being ‘connection ready’

PASA has published guidance defining what it means for a scheme to be ‘connection ready’ for pensions dashboards. The guidance suggests that the expected timeline for reaching this point is around 18 months due to industry-wide capacity constraints (read more).

ACTION: Review the guidance and consider any action points for your scheme.

Economic Crime and Corporate Transparency Act (ECCTA) and ban on corporate directors

The ECCTA sets out reforms intended to prevent criminal use of corporate entities. Some of these reforms will affect corporate trustees, as well as limited partnerships and Scottish limited partnerships used in certain pension scheme structures.

Alongside the Act, the government has confirmed that it will implement a ban on corporates acting as company directors, although an exception is expected for corporate entities with a ‘legal personality’, where the entity’s directors are, in turn, natural persons (read more).

ACTION: Most measures require secondary legislation and guidance before they come into force. Keep a watching brief on developments.

Deadline reminder: international data transfers

Schemes that transfer personal data outside the EEA in reliance on standard contractual clauses (SCCs) in agreements entered into before 21 September 2022 may need to update their contracts before 21 March 2024, when transitional arrangements end.

ACTION: Contact your usual A&O adviser if this is an issue for your scheme.

Need help with a pensions dispute? Visit allenovery.com/pensionsindispute.