Welcome to our monthly update on current legal issues for trustees of DB and hybrid 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 also have a separate DC-only briefing.

General Code ‘go live’ date: 27 March 2024

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.

TPR’s expectations on corporate M&A

TPR has published the text of a speech recently given by its Chief Executive, setting out its supervisory expectations and approach to the protection of pension schemes during merger and acquisition transactions. The key point to note is TPR’s expectation that, despite the non-arrival of the proposed new notifiable events regime, parties to M&A activity should engage with TPR as if those events were in place already (read more).

ACTION: Be aware of TPR’s expectations in this area; seek advice if relevant circumstances arise.

Preparing for the abolition of the LTA

HMRC is publishing regular newsletters on the abolition of the lifetime allowance from 6 April. Final regulations are expected 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.

Recovering overpayments: TPO update

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.

TPR view on capital backed journey plans

TPR has published a blog post discussing alternative DB funding arrangements – in particular, capital backed journey plans (read more).

ACTION: Review the blog post and engage with TPR if you are considering this.

TPR updates cybersecurity guidance

TPR has updated its cybersecurity guidance, setting out practical steps to meet its expectations in the General Code. TPR requests trustees to report significant scheme-specific incidents to it as soon as reasonably practicable (read more). TPR has also published a regulatory intervention report including a list of key steps for trustees to take in the event of a cyber security incident (read more).

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

Deadline reminder: international data transfers

Schemes that transfer personal data outside the EEA in reliance on standard contractual clauses (SCCs) in pre-21 September 2022 agreements 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.

TPR guidance: private market investments NEW

TPR has issued new guidance designed to help trustees who are considering investing in assets such as private equity/debt, private real estate or infrastructure and natural resources. The guidance provides a high-level overview of structures providing access to private market assets, the opportunities and risks of these investments and relevant legal and governance considerations. It also sets out some DB- and DC-specific issues for trustees of relevant schemes to consider, and links to additional resources (read more).

ACTION: Trustees considering private market investments should consider the guidance and take relevant advice.

PASA guidance: being ‘connection ready’

PASA has published guidance defining what it means for a scheme to be ‘connection ready’ for pensions dashboards. 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.

Watch this space

• The launch of the new DB funding code is expected in April 2024, applying to scheme valuations on and after 22 September 2024 (read more).
• There is currently no date for revised regulations on changes to the notifiable events regime (read more).