This month the pensions industry received an early Christmas present from the Chancellor, with her Mansion House speech announcing the “biggest pensions reform in decades". In this update, we share our initial impressions of the Government’s proposals to radically consolidate DC pension schemes and LGPS funds.
It was widely anticipated that the Chancellor would also announce some form of target or even mandate for pension schemes to invest in UK equities and / or infrastructure. In the end that wasn’t part of this initial package of measures but the government has made clear that it is still under active consideration. In this context, we consider trustees’ fiduciary duties and whether there is a case for clarification or even reform.
We also look at the latest updates for contract-based pension schemes, including the FCA’s expectations for SIPP operators and developments in the Advice Guidance Boundary Review. We share some helpful tools for employers, including our new notifiable events flowchart, and bring you the latest episodes of our Pensions Pod. And there are updates on pensions dashboards, our recent cyber security webinar and the approach of the Pensions Regulator (TPR) in response to LDI issues.
Pensions reforms
Building on the foundations laid by the previous Chancellor, on 14 November in her maiden Mansion House speech Rachel Reeves set out her proposals for reforming both the DC pensions industry and the LGPS, planning significant consolidation for both with a view to stimulating UK economic growth. The speech was accompanied by the publication of the interim findings from phase one of the Government’s pensions ecosystem review and two consultation papers. We share some early thoughts on the proposals set out (and some notable absences).
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Helping pension scheme members make informed decisions about how they use their pension pots is a key area of focus for the new government in its drive to help members get better value for money. In this article, our financial services colleague John Roberts considers the FCA’s most recent update in its work on the Advice Guidance Boundary Review.
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Fiduciary Duties
Fiduciary duties and their interaction with the Government’s investment ambitions for pension fund assets will no doubt continue to be a hot topic into the New Year and beyond. Steven Hull and Mairi Carlin take an in depth look at the current extent of trustees’ duties and explore the case for reform in this article.
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Pensions Pod season 5 continues
Episodes 3 and 4 of the Burges Salmon Pensions Pod’s fifth season are now available.
In episode 3 hosts Chris Brown and Helen Norman are joined by Peter Dorward, Managing Director of IC Select (part of IGG) to discuss the assessment of fiduciary managers for DB schemes.
And in episode 4 our trainees round up the latest pensions news – including the Mansion House and budget announcements, the recent consultation to extend CDC schemes and TPR’s review of TCFD disclosures. Follow the link to listen to both new episodes:
Listen now >
Spotlight on SIPPs
The FCA has published a “Dear CEO” letter detailing its expectations of SIPP providers, including its priorities, expectations and planned work – John Roberts looks at the key focus areas in this update.
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Notifiable Events
Sponsors of DB pension schemes are required to notify TPR of certain events that may have an impact on their scheme. In light of a recent uptick in corporate activity, we have produced this flow-chart as an aide-memoire, reminding employers of the current notifiable events framework. To access your free copy please follow the link.
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News Round-up
Cyber risk for pension schemes webinar
On Thursday 28 November, we held a webinar focusing on cyber security for pension schemes. We were delighted to be joined by You Yu from the Pensions Regulator and Paul McClone of Aon for an informative discussion on the updated regulatory environment for pension schemes, and the actions they should be taking. We share some key takeaways from the session in this summary.
Watch the webinar >
Pensions dashboards update
In late October, the Government reaffirmed its commitment to the delivery of pensions dashboards. With the first connection dates in April 2025 fast approaching, we round up the latest dashboards developments and highlight how schemes should be preparing.
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LDI monitoring – increased scrutiny from TPR
Trustees of defined benefit schemes will have found themselves answering new questions in this year’s scheme return in relation to their LDI investments. Caius Mills from our Pensions Disputes team considers where schemes stand in relation to LDI claims two years on from the mini budget.
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Employment Rights Handbook
Designed to help employers navigate the changing legal landscape as the new Government implements its manifesto promise to bring about significant employment law reforms, our employment team have produced this helpful handbook. Each of the key proposals (including those in the Employment Rights Bill and outside it) is explained in an easy-to-read format, and the team offer their thoughts on the potential implications for employers.
Read the handbook >
We hope you find the above helpful but, as always, please do get in touch if you have any questions or you would like to discuss anything further.