- Pensions Regulator publishes interim response to Code of Practice rewrite consultation
- Pensions Ombudsman sets out Corporate Plan for 2021-24
- Former Norton Motorcycles owner to be prosecuted for pensions breaches
Pensions Regulator publishes interim response to Code of Practice rewrite consultation
The Pensions Regulator has made available a short interim response to the consultation on its new ‘unified’ Code of Practice (see Pensions Bulletin 2021/12). It sets out some background on the responses received and the steps that need to be taken before laying the final Code.
Amongst the key issues raised are the following:
- Own Risk Assessment (ORA) – the Regulator acknowledges the feedback received about the amount of work this will entail, the timeframe, what the ORA should look like and the burden it will place on smaller schemes. Whilst remaining of the view that trustees should prepare their first ORA in a timely fashion (ie taking the legislative timescales as a maximum but preparing the document in a shorter timescale as a matter of best practice) it will consider how often the ORA should be reviewed and whether any possible changes can be made, particularly for smaller schemes
- Unregulated investments (the “20%” or “80%” rule) – the Regulator has listened to the concerns raised about the restriction this might place on well governed, typically larger, schemes that hold unregulated assets as part of a well-managed investment strategy (see for example Pensions Bulletin 2021/23). The Regulator reiterates that it wishes to protect members of poorly run, typically small, schemes, but it will now explore options for achieving this whilst allowing schemes to maintain exposure to unregulated assets
- Use of the generic phrase “governing body” – whilst most responses about this were positive, there were some concerns, mainly from public service schemes. The Regulator has received suggestions for how to resolve this for these schemes and will examine them in greater detail
103 responses were received to the consultation, with around 10,000 individual answers to around 260 questions. Given the work needed to complete the review of the comments received and adjust as necessary, the Regulator does not expect to lay the new Code in Parliament before spring 2022 and therefore it is unlikely to become effective before summer 2022. There is also the possibility that some code content arising from the Pension Schemes Act 2021 may now find its way into the first edition of the new Code.
Comment
Three months on from the consultation closing, the publication of this interim response is helpful for the (admittedly few) clarifications made – in particular, there had been significant concern about the apparent imposition of a 20% limit on unregulated investments. The indication of when the new Code can be expected to take effect is also welcome and serves as a reminder that trustees should now start thinking about matters such as the ORA.
Pensions Ombudsman sets out Corporate Plan for 2021-24
The challenge of meeting an expected continuation of rising demand along with pension complaints becoming more complex, without a corresponding increase in resource, lies at the heart of the Pensions Ombudsman’s Corporate Plan for 2021-24 published on 23 August.
The Plan reviews progress achieved in 2020/21, sets some strategic goals for the three years ahead and some key performance indicators for 2021/22. The latter include closing 60% of pension complaints within nine months of their transfer to the early resolution service and 70% of pension complaints in total being closed within 12 months.
Amongst expected improvements are a new customer portal, enabling customers to submit general enquiries and online applications. This will be launched soon, once digital service standard requirements are met.
Future new sources of enquiries include those as a result of the launch of the Pensions Dashboard, as this should raise people’s awareness of pensions, and the Conditions for Transfers Regulations (see Pensions Bulletin 2021/21), expected to be laid before Parliament in the autumn, which whilst hopefully reducing the number of pension scam transfers, is also likely to lead to an increase in member complaints that trustees have wrongly blocked their transfer.
Comment
The Plan acknowledges that reducing waiting times for customers remains a priority. We hope that the improvements that are planned will help to deliver this, as will increasing familiarity with new systems and processes already in place.
Former Norton Motorcycles owner to be prosecuted for pensions breaches
The Pensions Regulator has announced that a former owner of Norton Motorcycles is to be prosecuted for illegally investing money into the business from three DC occupational pension schemes for which he was the sole trustee. The investments were made nearly a decade ago.
Comment
This is a useful reminder that, subject to certain exceptions, it is a criminal offence to invest more than 5% of the current market value of scheme resources in employer-related investments. Contravention of this can lead to a fine or imprisonment, or both.
