Welcome to your weekly update from the Allen & Overy Pensions team, covering all the latest legal and regulatory developments in the world of workplace pensions.

This week we cover the following topics: TPR speech on upcoming priorities; Latest HMRC newsletter; PPF blog post on establishing a public sector consolidator; and Compact on ‘high-growth investment’

TPR speech on upcoming priorities

The Pensions Regulator (TPR) has published a speech made by its CEO, Nausicaa Delfas, setting out its priorities. The speech identifies three areas of focus:

• Protecting savers, highlighting consolidation of both DC and DB schemes, and a focus on value rather than cost, as key ways of achieving this.
• Enhancing the system, with a particular emphasis on quality of trusteeship. TPR’s expectations of trustees will be made clear in its forthcoming General Code and it is ‘working with DWP to consider how best we improve quality of governance across all trustee boards’.
• Innovation, in particular in relation to ‘at retirement’ options. Ms Delfas suggested that the industry will need to bring ‘a product suite to market which works for different savers and different retirements’. She highlighted collective DC as an area for exploration, noting that TPR is ‘ready to build on our authorisation regime to facilitate this kind of pension provision’.

The speech also highlighted a change in TPR’s approach to regulation: whereas historically TPR’s focus has been guiding schemes towards compliance, it will now be ‘more assertive’. TPR will issue details of the action it will be taking as part of this initiative shortly. It will also launch a new digital and data strategy: ‘across all scheme types we will not only require you to disclose more information about your scheme, but to also analyse, interpret and act to spot and mitigate risks before they materialise’. TPR acknowledges that the DB Funding Code has taken longer than anticipated due to the parliamentary process, but says that the Code will ‘change the game in terms of the volume and type of data that we as a regulator can analyse to ensure savers’ interests are protected’.

Read the speech transcript.

Latest HMRC newsletter

HMRC has published its latest pension schemes newsletter (no. 153). The newsletter includes updates on migration to the Managing Pension Schemes service (MPSs), including that the service can now be used to create, compile and view event reports in-year for the tax year 2023 to 2024 onwards. Pension schemes with a Pension Scheme Tax Reference (PSTR) beginning with 0 need to migrate to the MPSs to be able to compile and submit an event report.

The newsletter asks schemes to check that their administrator details are up to date on both the MPSs and the Pension Schemes Online service, to ensure they receive future updates.

Read the newsletter.

PPF blog post on establishing a public sector consolidator

The Pension Protection Fund (PPF) has published a blog post discussing the possibility of a public sector consolidator for defined benefit schemes. A call for evidence was launched as part of the Mansion House announcements which sought views on the idea of a public sector consolidator and the potential for the PPF to provide this service (read more). The PPF’s response to that call for evidence suggested that they have the capability and experience to assume that role. The blog post echoes that message, citing PPF successes and strengths that it would bring to the task. It notes that design would be crucial and the consolidator would need to be a separate legal entity, with different processes to those currently used by the PPF.

Read the blog post.

Compact on ‘high-growth investment’

Twenty venture capital and growth equity firms have signed a compact aiming to encourage pension scheme investment in high growth companies. Signatories have committed to attracting UK pension schemes as limited partners into the funds they manage; partnering with pension investors to consider how they can produce effective investment structures to suit their needs; and sharing best practice/rules of engagement for working in private markets with DC schemes, particularly trustees and their consultants/advisers. The compact aligns with the government’s objective of encouraging pension schemes to invest more in ‘productive finance’, as set out in the Chancellor’s Mansion House proposals (read more).

Read more.