Pensions Bulletin 2024/32
Pensions & benefits Policy & regulation DB funding codeThis edition: Government publishes terms of reference for first phase of its pension review, SPP publishes DB funding regime guide.
Government publishes terms of reference for first phase of its pension review
The terms of reference of the first phase of the pensions review have been published, jointly by HM Treasury, the Department for Work and Pensions and the Ministry of Housing, Communities and Local Government. The review itself was announced by the Chancellor, Rachel Reeves in July (see Pensions Bulletin 2024/28), who also announced that Emma Reynolds, the Minister for Pensions, was leading it.
In the first phase policy development is promised in four areas:
- Driving scale and consolidation of DC workplace schemes;
- Tackling fragmentation and inefficiency in the Local Government Pension Scheme through consolidation and improved governance;
- The structure of the pensions ecosystem and achieving a greater focus on value to deliver better outcomes for future pensioners, rather than cost; and
- Encouraging further pension investment into UK assets to boost growth across the country.
The terms of reference also include what the review will have regard to when developing recommendations.
The review secretariat is to consult widely as it develops its analysis and policy options. The initial findings of this first phase will be reported later in 2024 and ahead of the introduction of the Pension Schemes Bill. The second phase of the review will start later in 2024 and alongside investment will consider further steps to improve pension outcomes, including assessing retirement adequacy. Ongoing policy development with respect to defined benefit workplace pension schemes will remain separate from the review.
Comment
The July announcement was little more than a press release, but we have learnt little more from this latest document. As promised in July, this first phase is very much focussed on unlocking investment potential. We look forward to the wide consultation that is promised.
SPP publishes DB funding regime guide
The Society of Pension Professionals has published a short guide to the new DB funding regime that comes into force for valuation effective dates falling on or after 22 September 2024. Produced by the Society’s Covenant Committee, after the necessary introductions and scene setting, its emphasis is on the role that employer covenant and its assessment plays in the new regime.
Comment
The guide succeeds in getting over the essence of the new regime in little more than four sides and the increased role that covenant assessment plays. As such, it is a useful introduction to the subject.
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