The Pensions Regulator's Draft Single Code of Practice

A draft single code of practice (the Single Code) has been published by The Pensions Regulator (TPR). The Single Code deals with the governance and administration of pension schemes and applies to pension scheme trustees.

The initial draft is part of a first phase intended to replace ten existing codes of practice. TPR plans to replace all existing codes of practice into the Single Code in a series of phases. TPR also plans to review all existing guidance.

In addition to merging ten existing codes of practice, the Single Code covers new topics such as remuneration, stewardship and climate change.

The Single Code sets out TPR's expectations for compliance with the law. It is not legally binding, but the courts and TPR may take compliance with the Single Code into consideration in deciding whether a statutory requirement has been met. In practice, 
therefore, compliance with the Single Code is likely to be seen as mandatory.

In due course trustees will need to familiarise themselves with the Single Code and review their existing internal controls and procedures in line with the Single Code.

Insights

Risk management, reduced recovery plans and mitigation—TPR’s Annual Funding Statement 2022

Writing for LexisNexis, senior knowledge development lawyer Julia Ward examines the key themes in the Pension Regulator's Annual Funding Statement 2022. This is particularly relevant for trustees and sponsors of defined benefit pension schemes with valuation dates between 22 September 2021 and 21 September 2022 by setting out how to approach valuations in the current political-economic climate.

TPR’s consultation on consolidated draft enforcement policy and updated prosecution policy aims to provide greater transparency on enforcement and prosecution

Pensions analysis: The Pensions Regulator (TPR) has published its consultation response and draft enforcement policy, consolidating previous policies and helping to make the enforcement powers clearer through more streamlined policy documents. Following the response, TPR has launched a further consultation on its draft enforcement and prosecution policy. Chris Edwards-Earl, senior associate at Stephenson Harwood analyses the consultations and its implications for pensions schemes.

Has the scope for ESG investments by pension schemes widened?

A recent case (Butler-Sloss and others v Charity Commission for England and Wales) has been handed down where the court has permitted the trustees of two charities to adopt an ESG-based investment strategy. This is notwithstanding that the trustees acknowledged that the investment strategy would provide a lower rate of return in the short-term when compared with other, less restrictive, investment strategies.

TPR on the warpath — two recent cases in profile

Writing for Professional Pensions, senior associate Chris Edwards-Earl discusses two recently published cases where the Pensions Regulator exercised its moral hazard powers, which have been recently strengthened by the Pension Schemes Act 2021. (£)

The dash to be dashboard ready

Pensions analysis: It seems that it is now full steam ahead for the introduction of pension dashboards. A pension dashboard will be an online platform that can be used by pension scheme members to access information about all of their occupational pension schemes (including the State Pension) in one place. It is the responsibility of the Pensions Dashboards Programme (PDP) to design and implement the infrastructure that will make pensions dashboards work. The government is currently consulting on draft regulations which set out the detailed framework for the provision and operation of this service, as well as the obligations on occupational pension schemes to onboard onto a dashboard.

Cybersecurity: is your pension scheme prepared for the expected? Fail to prepare; prepare to fail

The level of cybercrime continues to grow at an unprecedented rate in the UK and across the globe, with UK Government figures from 2021 showing that nearly 40% of businesses surveyed had suffered cyber security breaches or attacks in the last year. Over recent years the threat of attacks has been exacerbated by the increase in staff working from home, and from increased political tensions and activity from hostile states.

What the Mitchells & Butlers case says about rectification

Last month, the trustee of the Mitchells & Butlers pension plan secured a victory in court to rectify the plan’s rules. In addition to rectification, the judgment deals with issues including proper consultation with the plan actuary for valid amendments and the principle of bona fide purchaser for value without notice as a bar to rectification. Chris Edwards-Earl looks at these issues in a recent article published in Professional Pensions.

Restrictions on statutory transfers out

Trustees should be aware that they will have new obligations with respect to statutory transfers out from 30 November 2021. The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 will provide trustees with new obligations in a bid to protect members from transfers to scam arrangements. The regulations will require further transfer due diligence checks from trustees before a transfer can be made and will prevent transfers where 'red flags' are present. The regulations also require trustees to ensure that members receive scam advice from the Money and Pensions Service (MaPs) where certain warning signs are present.

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