Welcome to our September Pensions Law update – covering all your key pensions news and highlights for August and September.
Traditionally the summer Parliamentary recess marks the beginning of a quieter period for pensions law development, but, as we reported in July, with the Mansion House reform proposals landing just before the school holidays, it's been a busy summer for the industry. Here at Burges Salmon we’ve been working with our colleagues at XPS Pensions Group and Premier Miton, putting together a proposal detailing how, with some changes to the legal and regulatory environment, we think up to £100bn could be made available to improve outcomes for DB members, close the generational gap in retirement savings or invest in the UK economy.
Staying with the Mansion House reforms proposals, our public sector pensions team have been looking in detail at the changes being consulted on for the Local Government Pension Scheme. Elsewhere, ESG remains a hot topic and we were delighted in August when Kate Granville Smith, Director in our pensions team and our ESG lead, was recognised as an Environmental, Social and Governance Distinguished Adviser in this year’s Financier Worldwide 2023 Power Players list – congratulations Kate!
Its also been a busy couple of months in the courts and in this month’s round up our Pensions Disputes team reflect on the High Court’s decision in BBC v BBC Pension Trust. The BBC has already been given permission to appeal the decision to the Court of Appeal, as have Virgin Media in the important decision regarding section 37 which we reported on in July. We will update you on further developments as and when the appeals are heard.
Finally, we round up the latest in cyber security, FCA information on supporting vulnerable consumers seeking to transfer their pensions and this year’s PPF levy consultation proposals, plus we look ahead to the season 4 of the Burges Salmon Pensions Pod.
We hope you find this round up helpful. As always, please do get in touch if you have any questions or would like to discuss anything further.
The future of DB schemes: how changes to the legal and regulatory environment could unlock up to £100bn
In response to the DWP’s call for evidence relating to the future of DB schemes (issued as part of the Mansion House reforms proposals), in a joint report with XPS Pensions Group and Premier Miton, we set out how amending the law on surpluses could make long-term run on a viable alternative to buying out benefits with an insurer for DB schemes, and how this could benefit members and UK businesses alike.
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LGPS investments: Consultation on acceleration of asset pooling and increased investment in UK growth
Ahead of the consultation exercise closing on 2 October, towards the end of September we reviewed the key changes being considered for Local Government Pension Scheme investments as part of the Mansion House reforms. First, we looked at the proposals to go further and faster with the pooling of LGPS assets.
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And then we considered the proposal for increased investment by LGPS funds and pools into high growth UK companies via private equity.
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BBC v BBC Pension Trust: What does the decision mean for schemes making benefit changes?
On 28 July, judgment relating to the operation of an amendment power fetter was handed down by the High Court in BBC v BBC Pension Trust Limited & Anor [2023] EWHC 1965 (Ch).
Together with solicitor Simon Lellouche, Disputes Partners Suzanne Padmore and Justin Briggs, look in detail at how the court reached its decision, and identify the key takeaways for trustees and employers, in a decision that will be of particular interest to scheme with similar restrictions on their amendment power.
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ESG round up
Climate data shortcomings: Trustees encouraged to challenge advisers
Kate Granville Smith updates us on how Trustees are being encouraged by TPR to challenge advisers on their climate assumptions and the data they use.
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ESG litigation: Court of Appeal dismisses claim against corporate trustee of a pension scheme
In July the Court of Appeal dismissed a claim against the directors of the Universities Superannuation Scheme for allegedly failing to deliver on their climate commitments. In this post, Kate considers both this decision and the future of climate-risk related litigation.
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Making climate scenario analysis “decision-useful”: TPR issues blog
TPR says trustees can drive change in relation to climate scenario analysis and make the models “decision useful”. Kate Granville Smith investigates.
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Other news
Exponential increase in cyber security breaches reported by UK pension schemes
We look at the increased threat schemes are facing and make the case for TPR’s guidance to go further to help schemes.
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Updated guidance from TPR for DC schemes following regulation changes
Partner Clive Pugh updates us on changes to some of TPR’s guidance documents for DC schemes, being made to help schemes comply with their obligations under new regulations to ensure they consider all the investment opportunities available, in order to achieve the best value for scheme members.
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FCA: How to support consumers with characteristics of vulnerability when providing pension transfer advice
Associate John Roberts looks at new information published by the Financial Conduct Authority advising that firms should be alert to “potential indicators of vulnerability” when consumers seek advice about transferring DB or other pension benefits.
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PPF levy 2024/25 consultation: good news for schemes as estimated levy due to halve but the PPF says future reforms will be needed
Senior Associate Louise Pettit and Trainee Solicitor Luke Parry-Billings look at the PPF’s proposals for the 2024/25 levy, focussing in particular on how the PPF says it is constrained from reducing the levy further by existing legislation, and the changes that will be needed going forwards.
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Return of the Burges Salmon pensions pod
Looking ahead, this Autumn sees the return of the ever-popular Burges Salmon Pensions pod. Join experts from around our team to discuss the latest news and developments in the pensions law world. To whet your appetite, all episodes from our past 3 seasons are available here.