May 2024 Pensions Law Update

Welcome to the May edition of our Pensions Law update.

1 May was an important date in the Burges Salmon pensions world as we celebrated two new partners joining the team – home grown talent Chris Brown is promoted to the partnership and we welcome highly regarded pensions partner Steven Hull, who joins us from Eversheds. In recognition of the growth of our practice and to better reflect the diversity of our work, with effect from 1 May our team also has a new name – we are now the Burges Salmon Pensions and Lifetime Savings team.

We’re shining a spotlight on ESG in May, with three articles on developments in this fast-changing area. This month we’ve been delighted to launch the latest versions of our innovative ESG and International Triage tools (the latter deals with UK pensions for international companies). Designed to help users navigate complex areas of the law, both these tools have been updated for the latest legal developments, and are available free of charge – more details below.

This newsletter also includes updates on this year’s annual funding statement from the Pensions Regulator (“TPR”), the increasing regulatory focus on value for money, the FCA’s response to complaints by former members of the British Steel Pension Scheme and much more.

Focus on ESG

Climate risk: TPR reviews disclosure reports

Very large pension schemes (those with over £1bn of assets under management) and authorised schemes have been subject to climate-related disclosure obligations since 2022. As part of its ESG focus, and in a bid to improve standards, TPR has conducted a review of the reports and has published its findings – including helpful examples of good practice, as well as identifying areas for improvement. Kate Granville Smith looks at the impact of TPR’s report for trustees.

Promoting the “S” in ESG

In this article, Imogen Shelley reports back from the launch event for the new guide for considering social factors (published by the Taskforce for Social Factors), including a helpful list of actions for trustees.

Fiduciary duties of pension trustees in the ESG context

The extent to which trustees can consider factors such as climate change and sustainability whilst complying with their fiduciary duties is a topic generating significant discussion within the industry. In the latest development, the Chair of the Work & Pensions Committee has written to the Pensions Minister setting out the issues identified by the Committee and seeking answers to a number of questions.

ESG made simpler: how our tool can help

Our ESG tool has been updated to take account of both the PLSA’s updated Stewardship and Voting Guidelines (summarised in our earlier article) and the General Code, which is of course now in force. As a reminder, our tool is an interactive guide, designed to help trustees and sponsoring employers navigate ESG law and guidance, and identify issues you may wish to consider further. We are very proud that the Tool was commended at the 2023 Lawyer Awards in the category “Innovation in New Product or Service”, for making ESG simpler for pension scheme trustees and sponsoring employers.

If you would be interested in accessing the tool, or our General Code ESG checklist, please request access via this link or get in touch with Kate Granville Smith, our ESG lead for Pensions.

DB developments

TPR’s annual funding statement published

The DB Funding and Investment Strategy Regulations came into force on 6 April and are now law – as a reminder the new regime will apply in respect of valuations with an effective date on or after 22 September 2024. TPR has yet to publish the final version of its accompanying Code of Practice. In this interim period therefore, this year’s annual funding statement from TPR is of particular interest – Mairi Carlin looks at the key takeaways for schemes.

Triage tool update

Our triage tool for International Companies looking at UK pensions has been updated to take account of the new Funding and Investment Strategy regulations now being in force – to request access to this fantastic free resource please follow the link in this article or get in touch with your usual Burges Salmon pensions team contact.

DB options consultation closes – what happens next?

The DWP’s consultation on Options for Defined Benefit schemes closed on 19 April. As anticipated, the consultation generated significant industry interest and responses. We share some of our thoughts on the proposals and what might happen next.

What’s new in DC?

Spotlight on value for money

Over recent months, its become clear that TPR is increasing its scrutiny of DC schemes in respect of the value for money they provide. We consider the impact of that scrutiny in this article:

News round up

FCA responds to complaints from BSPS members

On 22 April, the FCA published its decision letter, responding to complaints about its handling of reports of improper advice being provided by financial advisers to members of the British Steel Pension Scheme. We summarise the FCA’s findings:

Cyber risk in the pensions industry: a view from Europe

We look at the risk dashboard published by the European Insurance and Occupational Pensions Authority and consider how the conclusions of a UK specific dashboard might differ. 

Pensions Ombudsman determination in negligent misrepresentation complaint

What happens if an administrator incorrectly tells a member who is not eligible that they can join the scheme (and in fact allows them to accrue benefits)? This was considered in a complaint relating to the NHS Pension Scheme which came before the Pensions Ombudsman for determination.

Team news

This month we were delighted to receive nominations in three categories at the European Pensions Awards – European Pensions Law Firm of the Year, European Pensions Innovation Award and the Diversity Award. 

As a firm we’ve also just celebrated the 5 year anniversary of the opening of our Edinburgh office. We now have over 80 people based in the Scottish office, including six lawyers in our Pensions & Lifetime Savings team.

Employment Edit

Have you seen our Employment Edit? This fortnightly newsletter rounds up all of the latest news and developments in Employment law. If you’d like to receive a copy direct to your inbox, please follow the link to sign up to the mailing list.

We hope you find the above helpful but, as always, please do get in touch if have any questions or you would like to discuss anything further.