RSM UK is calling for a more joined up approach to implementing change for the pensions industry, as trustees face unprecedented workloads this year due to recent and imminent regulatory pressures. A plethora of changes from various regulatory bodies that will increase the workloads of pensions trustees significantly this year include:
- The defined benefit funding framework
- New notifiable events regime
- TCFD (Taskforce on Climate-related Disclosures) and ESG (Environment, Social, Governance)
- Changes to normal pension age
- Simpler annual benefits statements
- Stronger nudge guidance
- New transfer regulations
- GMP (Guaranteed Minimum Pension) equalisation
- Preparation for the new pensions dashboard, proposed to launch in 2023
Ian Bell, Head of Pensions, RSM UK, says: ‘With so much new regulation either launching recently or looming on the horizon, pension trustees will have a full workload to look forward to in 2022. They are returning from the Christmas break with a daunting to do list, and with The Pensions Regulator’s new criminal sanctions powers still fresh in their minds. Top priority will be how to hit the deadlines from the deluge of new demands and regulations that have coincided from a variety of governing bodies. This, in addition to their BAU work, will be an unenviable task which will place huge pressure on Trustee Boards and their advisors in understanding the requirements, let alone implementing the changes on matters such as ESG, TCFD and the new funding framework.
‘As a trustee myself I can see the pressure they are under from both sides of the fence. The industry does not seem to be taking a joined-up approach to this issue, and there appears to be little consideration for how much additional work these changes will create for trustees, both now and in the coming years. We are therefore asking The Pensions Regulator to be sympathetic to the pressures pension trustees are under, particularly smaller schemes with limited governance budgets, and to avoid introducing any further new regulation this year.’
Many pension trustees undertake their roles on a voluntary basis alongside their day jobs, meaning time allowed by employers for meetings, understanding the new regulatory requirements and training will need to increase. The long-awaited new single code of practice from The Pensions Regulator will also be arriving this Summer.
Ian Bell concludes: ‘While the new regulations are well intended, there needs to be a pause in the cycle to give trustees some breathing space for implementation. This could start with a reasonable implementation timetable from The Pensions Regulator for the new code of practice.’