Pensions: what to expect in 2022
In this week's Insight we look at the year ahead and the key dates to look out for in 2022 with additional commentary on the most recent developments.
Trustees and pensions advisers will be kept busy throughout the year with the usual pensions business and some notable new developments including on the new scheme funding regime and the Pensions Regulator's new single code of practice.
The Pensions Regulator is expected to consult on a draft code of practice on collective money purchase schemes this month.
7 January 2022
Deadline for submitting annual compliance statement on investment consultancy and fiduciary management to the Competition and Markets Authority confirming compliance with the CMA Order.
31 March 2022
Deadline for sending:
- scheme returns to the Regulator; and
- contingent asset certificates, asset backed contribution certificates and special category applications to the Pension Protection Fund.
The Regulator has confirmed the addition of new questions for DB and hybrid schemes in this year's scheme return including for applicable schemes the website address for the SIP, implementation scheme, climate change report publication and the chair's statement and also the trustee assessment of the employer covenant grading (if available).
The final PPF levy rules for 2022/23 confirm the continuation of the 2021/22 processes introduced to ease the impact of the pandemic including the small scheme adjustment, COVID-19 payment easement and the lower cap on the risk-based levy (for further details see here). The final rules contain one additional measure for 2022/23 only, a limit of 25% on increases to the risk-based levy designed to safeguard the small proportion of schemes whose levy bill would otherwise increase (80+% are estimated to see their risk-based levy decrease).
31 March 2022
Legacy public sector schemes will close to future accrual on 31 March 2022 with reformed schemes opening on 1 April 2022 – see our December Insight.
The Regulator's new single code of practice is expected to be laid before Parliament this Spring. One of the most notable developments is the requirement for schemes with 100 or more members to complete an 'own risk assessment'. You can download our essential guide to the new code here.
Draft DWP regulations on defined benefit scheme funding are expected to be published this Spring.
The Pension Scheme Act 2021 and secondary legislation herald a new DB scheme funding approach which will require trustees to set a scheme-specific funding and investment strategy (known as the 'long term objective') and produce a written statement of the strategy, a copy of which must be sent to the Regulator.
A new DB funding code of practice will set out the Regulator's approach to this new framework including the introduction of a twin-track approach, fast track for those schemes that can meet set guidelines and a bespoke route for those that need additional flexibility. The second consultation on the new code has been delayed until late Summer 2022. The first consultation can be accessed here.
5pm, 1 April 2022
Contingent asset documents including guarantor strength reports need to be emailed to the PPF.
6 April 2022
- Legislation introducing the increase of normal minimum pension age to 57 changes comes into effect – see our November Insight. The increase itself is not due to take place until 6 April 2028.
- Notifiable events changes expected to come into force with two additional events (a decision in principle by scheme employer to sell 'material proportion' of its business or assets or to grant or extend a 'relevant security') and other changes – see our September Insight.
- 'Stronger nudge' to pensions guidance legislation expected to come into force – see our July Insight.
- Implementation of the £100 de minimis level on DC default flat fee charges – see our November Insight.
5pm, 29 April 2022
Deficit-reduction contributions certificates and exempt transfer applications need to be sent to the Regulator and the PPF respectively.
5pm, 30 June 2022
Full block transfers need to be certified to the Regulator by this deadline.
1 August 2022
The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations and other consequential regulations which flesh out the detail of the legislative framework for CMP schemes are expected to come into force on 1 August 2022.
See here for the DWP's response to its July 2021 consultation on the draft CMP Regulations.
It has been reported that the application for judicial review of the Government's decision to effectively replace RPI with CPIH from 2030 which was submitted by the trustees of the BT, Ford and Marks and Spencer pension schemes has been granted by the High Court (see our April Insight). It is anticipated that the hearing will take place this Summer.
Late Summer 2022
Publication of the Regulator's second consultation on the revised defined benefit funding code of practice has been delayed until late Summer 2022. This will allow time for stakeholders to consider the DWP's consultation on the draft funding and investment regulations.
1 October 2022
Governance and reporting obligations under the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 will be extended to schemes with assets of £1bn or more.
On 16 December 2021, the Regulator published the final form of its climate-related governance and reporting guidance for schemes which have governance and reporting obligations under the climate change regulations (see also our July 2021 Insight). As well as the guidance, the Regulator has included a new appendix in its monetary penalties policy to cover breaches of the climate change regulations.
1 October 2022
Simpler annual benefit statements legislation for DC schemes used for auto-enrolments comes into effect – see our October Insight.
During 2022: also look out for
Employer covenant guidance:
The Regulator is intending to consult on a review of the current employer covenant guidance during 2022 – the revision will include additional information on how to take account of climate-related risks and opportunities when assessing the covenant.
Royal Mail Collective Pension Plan:
Royal Mail consulted on the establishment of what would be the first CMP scheme in the UK in 2021. The new scheme is expected to be set up during 2022.
The Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill has received cross-party support and could potentially reach the statute books during 2022 – see here for more information.
Private member's bill expanding auto-enrolment to all jobholders aged at least 18 and removing the lower qualifying earnings threshold is expected to be published before long. The Pensions (Extension of Automatic Enrolment) Bill received its first reading in the House of Commons on 5 January 2022.
An updated version of the Pension Scams Industry Group's 'Combating Pension Scams: a Code of Good Practice' is expected this year. See our In-Depth Insight for details of the new transfer value regulations which came into force on 30 November 2021.
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