Pensions law trustee update - Q1 2023
Priorities for trustees this quarter are to:
- consider the Pensions Regulator's (Regulator) draft defined benefit funding code (Draft Code) and, in particular, the impact this will have on their scheme's investments and level of risk they are able to take;
- ensure they are on track with their pension dashboard preparations, particularly in light of:
- the Regulator's new enforcement and compliance policy; and
- proposals to prohibit the assets of a pension scheme from being used to reimburse trustees in respect of any fine or penalty imposed on them for breach of their pensions dashboard obligations; and
- ensure they are undertaking sufficient due diligence before undertaking a transfer out to avoid full liability for transfers that turn out to be scams.
In addition, trustees should be aware that:
- certain European judgments relating to the calculation of PPF benefits will not be retained. This will open the door for the PPF to move away from minimum benefit limits imposed by EU law;
- a wide-ranging set of reforms of the financial services sector, referred to as the 'Edinburgh Reforms', were announced by the Chancellor of the Exchequer on 9 December 2022. A number of these impact pension schemes; and
- the Employment Appeal Tribunal dismissed age discrimination complaints save for two claimants who had brought their claims before 31 December 2020 (the date of the UK's withdrawal from the European Union).It was held that the claimants could not rely on the general principle of EU law after 31 December 2020. This decision will have a wider impact given any similar cases must have begun before 31 December 2020.
