Pensions update | May 2024

Key pensions issues this month include the Pensions Regulator CEO setting out the Regulator's priorities for the year ahead and what the 4 July general election could mean for pensions.

"Pension schemes must get the basics right – the stakes have never been higher" says The Pensions Regulator CEO

The Pensions Regulator chief executive Nausicaa Delfas set out the Regulator's priorities for the year ahead in a speech to the pensions industry on 22 May 2024. A key priority identified was that the Regulator intends to scrutinise smaller schemes with assets of less than £100 million much more closely. In particular, the Regulator will be looking for evidence that smaller schemes are complying with their requirement to undertake a detailed assessment of value for members.

Ms Delfas said, “Regulatory compliance is not optional. You will see a step-change in our enforcement approach – going out into the market, at scale, to ensure schemes have high quality data and deliver value for members.

The stakes have never been higher. Savers will soon be interacting with their personal data as never before through pensions dashboards and the Value for Money framework.

Failure to meet the deadlines is not an option. That is why we will be engaging hundreds of schemes asking them to account for how they are measuring and improving their data and will be taking action where trustees are failing to meet our expectations."

Ms Delfas also covered the Regulator's plans to bring professional trustee firms within its regulatory grip, looking firstly to implement a 'voluntary supervision' arrangement.

For more information on the Regulator's expectations and assistance to ensure that your scheme is meeting them, please contact Celine Mather-Franks.

Fourth July General Election – What could this mean for pensions?

Prime Minister Rishi Sunak has now called a general election for 4^th July, but what could this mean for pensions?

It's clear that our next government will have some significant decisions to make on pensions policy. One point on which both the Conservatives and Labour have agreed is their commitment to the pensions triple lock. This safeguards that the state pension rises by the highest of average earnings growth, inflation or 2.5%.

What else could be up for discussion?

• Increase to state pension age – I very much doubt that this would be a popular thing for any party to publicise in their manifesto, but it is very likely to feature in future plans. The current state pension age is 66, currently due to rise to 67 in 2028 and 68 by 2046. Could we see these increases brought in sooner?

• The Lifetime Allowance – this was abolished in April this year; however Labour have previously said that they would want to reintroduce it, which could be complicated.

• Automatic enrolment – we are still waiting to see the minimum age to be lowered from 22 to 18 and to drop the lower qualifying earnings band. These changes received Royal Assent in September 2023 but are still yet to be implemented through regulations. This is most likely going to be further delayed by the general election process.