In advance of the landmark pension reforms, due to come into effect on 6 April 2015, the Pensions Regulator (TPR) has released the first part of a communications package designed to help trustees prepare for the imminent changes.
In addition, TPR has launched a consultation period in respect of its guidance on DB to DC transfers and conversions.
The communications package
TPR has launched the first part of a communications package, which is intended to help trustees prepare for April’s radical pension reforms.
The package will include:
- An ‘essential guide’ for trustees of defined contribution (DC) schemes on new rules about governance and charge controls that will affect them from 6 April. It covers key topics such as meeting new governance standards and new charge controls (including a charge cap in relation to schemes used for automatic enrolment). In the meantime, TPR expects trustees to still refer to the existing DC code, which will be updated to reflect the April 2015 legislative changes. TPR will also continue to highlight any changes in the law to trustees.
- Guidance for trustees of defined benefit (DB) schemes in respect of a member request to transfer from a DB to a DC scheme, in order to access the new pension flexibilities. In respect of this guidance, TPR has launched a consultation period about its draft version, which will run from 12 February 2015 until 17 Mach 2015. The draft guidance aims to:
- help trustees ensure they have appropriate processes in place to manage transfer requests;
- prompt trustees to consider the impact of transfer values as part of an integrated approach to risk management of their scheme; and
- address the requirement for trustees to provide clear information for members so that they can get independent advice on the best option for them.
- Further guidance for trustees, to be released in March, which will take into account the publication of further DWP regulations, addressing the new pension flexibilities. This will include information regarding how trustees should direct their members to the new ‘Pensions Wise’ service.
- Updated ‘scorpion’ communications materials, again to be released in March, which will help members understand the risks of pensions and investment scams, which are expected to evolve as a result of the new pension freedoms.
TPR will work with the DWP, Treasury, FCA, Money Advice Service, Pensions Advisory Service and others to ensure that there is ample information available and that this is signposted to trustees and managers in due course. The new pension flexibilities will bring unprecedented change to the UK’s pension landscape - as such, we are encouraged by TPR’s commitment to helping trustees by publishing guidance, to aid their understanding of the changes. It is hoped that trustees will then be in a position to properly communicate the impact of the changes on members’ retirement plans.
In view of the imminent changes on the horizon, it is important that trustees and members are fully equipped to make the right decision in terms of retirement benefits.