DB funding reform could be on a slower timetable that previously expected, according to a written statement from the Pensions Minister, published last night.
Following Royal Assent on the Pension Schemes Act 2021, the Government now has powers to produce ‘secondary’ legislation which provides further detail on how the new rules are to apply.
But the Act covers a wide range of government priorities and Guy Opperman’s new statement suggests that other initiatives will get earlier attention than reform of the DB funding code, according to LCP partner David Everett.
The statement suggests that regulations and guidance will be produced on topics including: climate change, pensions dashboards, collective money purchase (often known as CDC) schemes, enforcement powers for the Pensions Regulator, pension transfers and scams, and DB pension scheme funding.
The statement indicates that priorities will include:
- Laying climate change regulations by the summer, to come into force ahead of the COP26 climate summit
- Consulting on TPR enforcement powers, with a view to implementation in the Autumn
- Summer consultation on CDC regulations, and implementation of scam measures in the Autumn
- Dashboard regulations published later in the year, with implementation in 2022 and with a view to the dashboard still going live in 2023
However, on DB funding, the timetable is more elongated with talk of consultation on draft regulations later in the year, only after the ‘engagement’ with interested parties promised in the House of Lords debates, and in collaboration with TPR’s own evolving work on the funding code which in turn will be subject to ‘full consultation’.
Everett said: “The Government has multiple priorities and each of them requires further regulations or guidance before it can be taken forward.
“The long list of powers arising from the Pension Schemes Act will need new laws in a range of areas and the DWP cannot physically move them all forward at the same time.
“The Minister’s statement suggests that progress in areas such as climate change, TPR powers, pensions dashboards and CDC schemes are a priority.
“The language on scheme funding suggests that reform may be moving into the ‘slow lane’, especially if the Pensions Regulator feels that it needs to see DWP’s regulations before it can publish its own consultation”.
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