Issues affecting all schemes
Climate change - governance and reporting requirements
The Pensions Regulator has published finalised guidance for trustees on complying with the new climate change-related governance and reporting requirements. The guidance is designed to complement the government's statutory guidance on the requirements. It covers:
- Strategy and scenario analysis.
- Risk management.
- Publishing a climate change report.
In addition, the Regulator has published the finalised appendix to its monetary penalties policy setting out its approach to the penalties that it can impose for breach of the governance and reporting requirements. The Regulator has also responded to its consultation on the draft versions of the guidance and appendix.
The governance and reporting requirements came into force for schemes with £5 billion+ of assets on 1 October 2021 and will come into force for schemes with £1 billion+ of assets on 1 October 2022.
Action
No action required, but trustees of schemes that are subject to the governance and reporting requirements may find the guidance helpful.
Collective money purchase schemes - authorisation and supervision
The government has responded to its consultation on draft regulations setting out the detail of the authorisation and supervision framework for collective money purchase schemes. The framework is similar to the regime that applies to DC master trusts. Schemes will need to satisfy prescribed criteria for authorisation and comply with a range of ongoing obligations once authorised, including submitting annual supervisory returns and notifying the Pensions Regulator of prescribed "triggering" events.
The finalised regulations will come into force on 1 August 2022. To begin with, only single and connected employers will be able to establish collective money purchase schemes. The government will consider how the regime could be extended to include unconnected multi-employer schemes.
The government expects the Regulator to consult on a draft code of practice for collective money purchase schemes in January 2022.
Action
No action required.
Originally published December 2021
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