New guidance to help trustees get ready for landmark pension reforms
Thursday 12 February 2015
The first part of a communications package designed to help trustees prepare for significant changes in the pensions landscape that come into force on 6 April has been published today by The Pensions Regulator.
The package will include:
- An ‘essential guide’ for trustees of schemes providing money purchase benefits on new rules about governance and charge controls, which is published today.
- Guidance for trustees of defined benefit (DB) schemes on member requests for transfers from DB to defined contribution (DC) schemes in order to access the new pension flexibilities. A draft version of the guidance will be published for consultation shortly. The consultation closes on 17 March 2015.
- Guidance for trustees in March, following publication of further DWP regulations, to address the new pension flexibilities - including how trustees should direct their members to the new Pensions Wise service.
- Updated ‘scorpion’ communications materials in March to help members understand the risks of pensions and investment scams, which are expected to evolve as a result of the new pension freedoms.
The regulator’s interim chief executive Stephen Soper said:
“The pensions system is undergoing one of the biggest shake-ups in generations.
“We will be supporting trustees and managers through this period of intense change - by giving them tools they need to understand their new responsibilities and their role in communicating to members about the impact of their retirement choices.
“As well as our own material, we’re working with the DWP, Treasury, FCA, Money Advice Service, Pensions Advisory Service and others to make sure that a suite of information about the new pensions flexibilities is available and we will signpost trustees and managers to this as it develops.”
The first communication, an ‘essential guide’ specifically for DC trustees and managers, will help them prepare for the new rules on minimum governance standards and charge controls by providing an overview of changes that will affect them from 6 April.
It covers key topics such as meeting new governance standards, the appointment of a Chair and the annual completion of a Chair’s statement, new charge controls - including a charge cap in relation to schemes used for automatic enrolment - and further governance standards for ‘master trusts’.
The regulator’s executive director for DC Andrew Warwick-Thompson said:
“The new minimum governance standards complement our existing DC code of practice and provide a stronger foundation in law for the standards we’ve said we expect of trustees in order to provide good outcomes for members.
“In the meantime, we expect trustees to still refer to the existing DC code, which we will update later this year to reflect the April 2015 legislative changes, and we will continue to highlight to trustees any changes in the law.”
The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members’ benefits; reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
Matt Adams 01273 662086