The Pension Schemes Act 2021: New risks for not for profits (NFPs)

The Pension Schemes Act 2021 gives The Pensions Regulator (TPR) significant new powers from October 2021.

This includes two new Contribution Notice tests, intended to capture material ‘covenant leakage’ where value leaves employers impacting their ability to support their defined benefit (DB) pension schemes.

Sponsors of DB pension schemes may need to enhance their governance processes around reviewing actions that could lead to changes in an employer’s net income or assets in order to manage these new regulatory risks.

This will involve incorporating analysis of the impact of any changes on the pension scheme, where previously this may not have been a consideration within strategy discussions.

Read our overview to learn how these new TPR powers will affect not for profits.