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Pension
Schemes Bill

Our viewpoint

How will the Pension Schemes Bill shape pensions that are fit for the future? How will the new funding regime impact schemes, trustees and sponsors? 

Significant changes to the DB pensions world are afoot. How should sponsors respond to the new challenges? What do trustees need to do differently? 

Welcome to our Pension Schemes Bill insight hub – the only place you need to look to find all you need to know about how these changes will impact you. Our technical experts will be covering this regulatory development and posting comment and insight here. See here for our News Alert which provides a technical analysis of the Pension Schemes Bill.

The rest of the hub is divided into three sections covering key issues that are important for all schemes and sponsors to consider now: Funding, Regulator Powers and DB Consolidators. Click on the images below to take you to each of these sections.

Funding

"Education"

A new clearer and tougher funding regime

On 3 March 2020 the Pensions Regulator launched a major consultation into the future of the DB funding regime. This is set to be the biggest revolution to the requirements for scheme funding and investment for 15 years.

Whilst the legal basis of the new DB funding regime is not yet known, and we don’t expect that all the law will be in place until quite possibly the end of 2021, we expect the direction of travel indicated by the consultation to immediately influence ongoing and upcoming DB scheme valuations.

Implications for some pension scheme valuations are likely to include:

  • higher contributions payable by sponsors
  • earlier de-risking of investments
  • increased interest in transfers to insurance companies and consolidators 
  • regulatory pressure to close some schemes to future accrual, where still open 

You can find out more about the possible impact for you below. We envisage a number of schemes and sponsors may want to respond to the consultation that closes on 2 September. 

Contingent funding - bridging the gap

This webinar is packed with practical tips and best practice focusing on how you can use contingent funding approaches to help you meet the new funding requirements whilst making most efficient use of company resources.

Funding valuations in the current climate: Corporate action plan

Our action plan is intended to give a high-level overview of key areas for companies to consider as part of a current or upcoming funding valuation, in the context of the Pensions Regulator (TPR)’s 2020 Annual Funding Statement (AFS2020) as summarised in our recent News Alert. Specific priorities for different companies will vary depending on circumstances.

DB funding code in testing times

Watch our webinar for a look at why integrated risk management, contingency planning, covenant, funding and investment assessments are so important for schemes in a post Covid-19 landscape.

Powers

"Technology"

New Pensions Regulator powers

Following criticism in cases like BHS and Carillion, the Pensions Regulator is set to get extensive new powers under the Pension Schemes Bill. These include powers to impose Contribution Notices on companies or directors more easily – requiring them to make one-off and substantial contributions to pension schemes. They also include powers to send anyone to jail who acts in a way to increase the likelihood that pension benefits won’t be paid. This will require new governance approaches from companies and trustees to ensure “at risk” events are identified and appropriate action is taken.

How to avoid criminal penalties following big pension changes

The Pension Schemes Bill will significantly increase the Pensions Regulator’s powers and further add to the obligations of companies that sponsor DB schemes and the trustees of those schemes. Directors and trustees will need to take legal and other specialist advice to ensure they don’t fall foul of the new regime, as the penalties are severe in some cases, including unlimited fines and up to 7 years in jail.

Consolidators

"Future

A new pension consolidator regime

In June 2020 the Pensions Regulator kick-started the Consolidator regime by publishing new guidance on how it will regulate superfunds (also known as DB Consolidators).  It is now unlikely that the government will amend the Pension Schemes Bill directly in 2020 to create a permanent regulatory framework for Consolidators, but we are promised this in future legislation.  Could this be a solution for your scheme and improve the chance that your members’ pension benefits are paid? 

DB funding and investment in challenging times - how schemes can weather the storm

DB funding and investment in challenging times - how schemes can weather the storm

On-demand webinar

We look at why integrated risk management, contingency planning, covenant, funding and investment assessments are so important for schemes in a post Covid-19 landscape.

Watch on-demand