The Pensions Minister, Guy Opperman, has confirmed the Government’s timetable for implementing key elements of the Pension Schemes Act 2021. In a written ministerial statement published on 2 March, the Minister has confirmed the Government’s intention to introduce the new criminal offences and regulatory sanctions by the Autumn and to consult on draft regulations to underpin the new statutory funding requirements for defined benefit (DB) schemes later this year.
The Pension Schemes Act 2021 received Royal Assent on 11 February 2021. In time, the Act will introduce:
- three new criminal offences, including a sentence of up to seven years in jail for directors and other parties who fail to pay due regard to the interests of a DB scheme
- new powers for the Pensions Regulator including (among other things) the ability to issue fines of up to £1million on directors and other parties in a variety of circumstances, two new contribution notice triggers and extended information gathering powers
- new scheme funding requirements for DB schemes
- the legislative framework needed to create pensions dashboards
- the legislative framework to allow Collective Money Purchase pension schemes to be established
- powers to require pension schemes to address and report on climate-related risks
- strengthened rules around pension transfers to help prevent pension scams.
As far as the timing of these various measures is concerned, the Minister has confirmed that:
- On the Pension Regulator’s Powers – the Goverment will consult on the majority of draft regulations this Spring, and will bring these new powers and the criminal offences into force in the Autumn.
- On DB scheme funding – the Goverment will consult on draft regulations later this year following promised engagement with key interested parties, working closely with the Pensions Regulator as it develops the revised Funding Code, which will also be subject to a full consultation.
- For the duty to give notices and statements to the Regulator in respect of certain events – the Government we will consult on the draft regulations later this year, for commencement as soon as practical thereafter.
- On climate-related risks – the Government will lay the new regulations on managing climate-related risks this Summer to come into force on 1 October.
- On scams and Collective Money Purchase schemes – the Government plans to consult on draft regulations in early Summer, with commencement on the scams measures from early Autumn 2021.
- For the pensions dashboard – the Goverment’s aim is to consult on proposed regulations for the pensions dashboard later this year and lay draft regulations before Parliament for debate in 2022. Delivery of the dashboard remains on track for 2023 in line with the plans published by the Pensions Dashboards Programme.
To find out more about what these changes mean for your scheme or organisation speak to your usual HSF adviser or contact one of our pension specialists: