Pensions Bulletin 2024/36

Pensions Regulator firms up on data requirements for statement of strategy 

On 23 September 2024 the Pensions Regulator announced that DB schemes whose actuarial valuation dates are effective on or after 22 September 2024 should now refer to the new DB Funding Code which is expected to come into force in late November 2024.

However, the main purpose of the announcement is to publicise the Regulator’s interim response to its statement of strategy consultation launched in March 2024 on which the pensions industry had expressed so much concern (see Pensions Bulletin 2024/15). This interim response would appear to be the Regulator’s final view on the matter, the focus now turning to how such information is to be sent to the Regulator (the deadline for which is 15 months after the effective date of a post 22 September 2024 valuation).

Four statement of strategy templates have been published along with an extensive spreadsheet of data requirements. The templates cater for Fast Track / Bespoke submissions and for schemes that have reached / have yet to reach significant maturity, with the data submissions for each of these variants differing. Although it is not clear whether schemes are expected to create their own Statement of Strategy from these templates or simply use some variant of the spreadsheet on which to record the required inputs, we understand that the templates are purely illustrative, and that for the time being, schemes should focus on the data requirements as set out in the spreadsheet.

In its response to the consultation the Regulator briefly outlines the main comments it received to its proposals before going on to explain the main changes it has made as a result. From this, there have been some welcome simplifications, such as the removal of the need to submit detailed covenant information for low-risk schemes, the removal of the need to submit benefit cashflow information for a number of schemes, particularly those submitting under the Fast Track route and a single, settled definition of small schemes. Although the spreadsheet of data requirements has expanded from 168 to 307 rows, this would appear to simply be as a result of each row now being limited to one data question.

The required information is to be submitted in digital form via a new digital service which the Regulator expects to launch in Spring 2025. The Regulator specifically asks that schemes do not submit information for valuations under the new regime until this service has been launched. It is not clear at this stage how this digital service will operate.

A fuller response to the consultation is promised by the end of 2024. Separately, the Regulator says that it expects to publish its long-awaited covenant guidance “in the next few months”.

Pensions Regulator publishes 2024 scheme funding analysis

The Pensions Regulator has published the 2024 update to its annual funding statistics for UK defined benefit and hybrid pension schemes. The update is based on schemes with effective valuation dates between 22 September 2021 and 21 September 2022, known as tranche 17 schemes, and as such the results may not have been impacted by the interest rate rises and volatility in investment markets that occurred over the second half of 2022.

The key findings of the analysis, which covers 1,640 valuations, are that schemes were 97% funded on average, on a technical provisions basis, with 47% of schemes reporting a surplus position – up from 32% three years prior. The average recovery plan length for schemes in deficit was 4.7 years, down from 6.2 years three years prior.

In a change to the format of the reporting, in a bid to improve value to users by focusing the main bulletin on the key figures, further detail and other findings are set out in an annex. 

Pensions dashboard identity service provider confirmed

The Pensions Dashboards Programme has confirmed that GOV.UK One Login will be the identity service provider for anyone using the dashboard service. Provided by the UK government, GOV.UK One Login ensures users only have to prove their identity once and can use this proof to access other Government services they use.

Pensions dashboard standards – an update

In a blog published on 19 September 2024, Chris Curry, Principal of the Pensions Dashboards Programme, provides an update on the PDP’s progress with its standards. There are five standards set out on the PDP website and in recent weeks the PDP has updated its technical standards and code of connection. The data standards were updated in May 2024.

This leaves the reporting standards which are to be updated soon and the design standards which will be updated once they have been tested. Further technical documentation to accompany the technical standards will be released at a later date.

While all standards are subject to final approval by the Secretary of State for Work and Pensions, the PDP expects schemes and dashboards providers to use the updated draft versions to prepare for connection.

Pensions Ombudsman – Investigating complaints factsheet 

The Pensions Ombudsman has published a new factsheet setting out how his office investigates complaints against others, such as by trustees and those administering pension schemes. It has been designed to assist those approaching the Ombudsman with their concerns understand the processes that the Ombudsman’s office operates. It concludes with a section on timescales within which complaints about the Ombudsman’s office must be made where the individual raising the original complaint has concerns about the services being provided.