On the go: The minister for pensions and financial inclusion has laid out a plan for the upcoming secondary legislation following the Pension Schemes Act, giving priority to new climate change rules.
In a ministerial written statement published on Tuesday, Guy Opperman set out the next steps for new legislation after the Pension Schemes Act 2021 received royal assent in February.
He noted that following the consultation published by the Department for Work and Pensions on climate change in January, these regulations will be laid out in the summer to come into force ahead of COP26.
“This will make the UK the first major economy in the world to legislate for, and bring into practice, the recommendations of the Task Force on Climate-related Financial Disclosures, ensuring climate change is at the heart of the pensions system,” Opperman stressed.
On the Pensions Regulator’s new powers, the government promises to consult on the majority of draft regulations this spring, and will commence these powers and the criminal offences measures — which include a sentence of up to seven years in jail for bosses who plunder or run pension schemes into the ground — in the autumn, the minister noted.
“For the duty to give notices and statements to the regulator in respect of certain events, we will consult on the draft regulations later this year, for commencement as soon as practical thereafter,” he added.
The draft regulations for scams and collective defined contribution schemes will be consulted on in early summer, with the measures to combat pension fraud starting from early autumn.
The pensions dashboards will follow, with the government planning on consulting on proposed regulations “later this year and lay draft regulations before parliament for debate in 2022”, Opperman said.
“Delivery remains on track for 2023 in line with the plans published by the Pensions Dashboards Programme,” he noted.
Last in the queue will be defined benefit scheme funding, which the DWP will consult on draft regulations later this year.
Opperman promised “engagement with key interested parties, working closely with colleagues at TPR as they develop the revised funding code, which will also be subject to a full public consultation”.
Pensions Expert reported in January that the new regime for DB funding is likely to be delayed until 2022, as the watchdog is not expected to launch its second consultation on this matter until the second half of 2021.
David Everett, partner at LCP, noted that the government has multiple priorities in pensions, and “each of them requires further regulations or guidance before it can be taken forward”.
He said: “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.”
Everett noted that the language used on scheme funding “suggests that reform may be moving into the ‘slow lane’, especially if TPR feels that it needs to see DWP’s regulations before it can publish its own consultation”.
