Pensions: what's new this week - June 2022 # 3

Allen & Overy LLP

This week we cover topics including: TPR: dashboards guidance; TPR: DC scheme return guidance; PASA: updated DC governance guidance; Employment tribunal: not issuing pension statements to disabled employees was a failure to make reasonable adjustments.

  • TPR: dashboards guidance
  • TPR: DC scheme return guidance
  • PASA: updated DC governance guidance
  • Employment tribunal: not issuing pension statements to disabled employees was a failure to make reasonable adjustments

TPR: dashboards guidance

The Pensions Regulator (TPR) has published initial guidance for schemes on complying with pensions dashboard requirements (based on the current draft regulations), alongside a press release warning schemes that they must start preparing. Under current proposals, pension schemes will be required to connect to dashboards in line with a staging timetable starting in June 2023 (individual deadlines depend on the size and type of scheme, beginning with large master trusts). TPR will contact all pension schemes at least 12 months before their proposed connection deadline.

The guidance covers the steps needed before connection; ongoing requirements; a summary of how schemes will ‘match’ individuals to their pensions; information to be provided to members; and a checklist for schemes preparing to connect. It also includes a section on TPR’s enforcement powers, noting that TPR intends to use these fairly, proportionately and pragmatically, although the accompanying press release states that TPR ‘will take a dim view of trustees who carelessly fail to prioritise their dashboard responsibilities’. TPR will consult on its proposed dashboards compliance and enforcement policy in the autumn.

Some key action points for trustees include:

  • engaging early with administrators and advisers to establish how they can support your scheme;
  • considering how your scheme will connect to the dashboards i.e. through your existing administrator/provider’s interface, building your own interface, or using one provided by a third party;
  • considering data issues related to matching member records and calculating pension values; taking steps to improve and/or digitise data if needed;
  • ensuring processes will be in place to provide members with the required information about their accrued and projected pension value, within the set timeframes;
  • having pensions dashboards as a regular agenda item at trustee board meetings; and
  • considering what extra resources will be needed to deal with queries arising from the use of dashboards.

TPR’s guidance will be updated to reflect the finalised dashboard regulations and the standards being developed by the Money and Pensions Service (MaPS). Revised regulations are expected in autumn 2022. Consultations on the standards and guidance on early and voluntary connection are expected this summer.

A date for your diary: the press release includes a link to register for a pensions dashboards webinar on 28 July at 2.30pm which TPR asks trustees and administrators to join.

Read the guidance and the press release.

TPR: DC scheme return guidance

TPR has published updated guidance and resources for DC schemes on preparing for and completing their annual scheme return. There are two sets of guidance: one for schemes completing the usual return and another for those that need to complete the new two-part return, where they must complete a more detailed value for members assessment (for schemes with less than £100m assets), or are subject to new information requirements (for example, TCFD reporting).

Schemes that need to complete the usual return will be contacted by TPR between July and December 2022; those required to complete the two-part return will be contacted in July 2022.

Read the guidance.

PASA: updated DC governance guidance

The Pensions Administration Standards Association (PASA) has updated its DC governance guidance. Key changes since the 2018 version include:

  • a new section on the chair’s statement setting out an overview of the requirements, regulatory guidance and practical points on compliance. It notes that it is anticipated that the chair’s statement requirements will be revised after a Department for Work and Pensions (DWP) review;
  • more guidance on management information (information on the running of schemes), for example what trustees should expect to see in administration reports;
  • references in a number of areas to schemes utilising improvements in technology; and
  • additional guidance on transitioning to a new administrator.

Read the guidance.

Employment tribunal: not issuing pension statements to disabled employees was a failure to make reasonable adjustments

The Employment Tribunal has held that not providing an employee on a disability income scheme (DIS) with annual pension statements issued to other employees was a breach of the duty to make reasonable adjustments and put the employee at a substantial disadvantage (because he could not challenge the accuracy of his pension benefits).

Employees on the DIS had been excluded from receiving annual statements because of the bespoke nature of their benefit calculations, and therefore the cost and time involved in producing them.

This case is a reminder to consider carefully before treating categories of member differently, even where there may be practical incentives for doing so.

Read the judgment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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