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
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
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
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.
TPR guidance: private market investments
TPR has issued new guidance on private market investments, 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 investing in private markets 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.
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).
TPR has also published a regulatory intervention report into the cyber security incident that affected Capita in 2023, including a list of key steps for trustees to take in the event of an incident (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.
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.
