Pension Schemes Bill heralds significant change for UK pensions
What you need to know
• The Pension Schemes Bill 2019-20 was issued on 8 January 2020. It is substantively the same as the 2019 Bill, which was lost when Parliament was dissolved before the general election.
• In the coming months the Bill will make its way through Parliament before becoming law. Some of the detail will be set out in regulations which will follow later.
• However, some aspects will be very relevant now. Most notably, trustees and employers should be aware of the Pensions Regulator’s expected new powers and the direction of travel on defined benefit (DB) pension scheme funding and investment strategy.
• A consultation on the principles for the Regulator’s new DB funding code, which is expected to follow in March, is anticipated to set out more detail on the new funding rules.
• The Bill signals changes to both DB and defined contribution (DC) schemes.
Actions you can take
Along with being aware of the changes, it will be important to reflect changes in decisions being made now:
• Understand the possible changes to funding rules now to prevent having to rework plans later if agreeing funding and investment strategy for DB schemes.
• Assess whether collective DC is now another option for your scheme if you are considering benefit design.
• Take account of the future need to supply data for use in dashboards when undertaking any data projects.
• Employees and trustees should be aware of proposed new Regulator powers and sanctions in any corporate activity.
The major changes in the Pension Schemes Bill
The finer detail: Key items covered by the Pension Schemes Bill 2019-20
For further information, please get in touch with Wayne Segers or William Fitchew or speak to your usual XPS Pensions contact.