On 1 October 2021, key provisions of the Pension Schemes Act 2021 (PSA 2021) come into force. Trustees and sponsors of occupational pension schemes will be under a new regulatory regime as The Pension Regulator’s (TPR) powers are extended. In addition, trustees of certain schemes will need to comply with new requirements on climate change risk reporting and governance, and defined contribution value for member assessments.
| PSA 2021 provisions at a glance | Expected date to be in force |
|---|---|
| New grounds for TPR to issue a contribution notice – TPR will have two new grounds on which it can issue a contribution notice to require payments to pension schemes. | 1 October 2021 |
| New criminal offences and civil penalties – a broad range of new criminal and civil offences have been created under the PSA 2021. The most serious breaches (wilful or reckless behaviour, or a failure to act that adversely affects a Defined Benefit Scheme) could result in seven years’ imprisonment and/or unlimited fines. | 1 October 2021 |
| New notifiable events regime – extending the scope of the notifiable events regime to cover relevant corporate transactions and to introduce penalties for non-compliance. | 1 October 2021 – penalty regime for non-compliance 1 April 2022 – corporate transaction notifiable events |
| Broadening TPR‘s investigatory powers – TPR’s information gathering and investigatory powers will be broadened under the PSA 2021. TPR will be able to summon relevant individuals for interviews and inspect a broader range of premises. This will be backed by new criminal sanctions and civil penalties. | 1 October 2021 |
| A new defined benefit (DB) funding regime – a new DB funding regime is expected to introduce tougher funding standards. This could see sponsors being required to increase their contributions. | Late 2022 / early 2023 |
| Introducing climate change risk reporting and governance requirements – new climate change governance and disclosure requirements for pension schemes will apply to the largest pension schemes first. | 1 October 2021 |
| New restrictions on the right to request a statutory transfer – these new restrictions will apply, requiring new prescribed conditions to be met. This is intended to add an extra layer of member protection against pension scams. | Autumn 2021 |
| New value for members’ requirements – the trustees of certain smaller schemes will have to carry out a detailed assessment of how their scheme delivers value for members. | 1 October 2021 |
| Pensions dashboards – using a pensions dashboard, individuals will be able to view all of their pension information in a single place. To facilitate this, schemes will need to plug their scheme data into pensions dashboards using common data standards. | April 2023 – 2026 (the requirements are being phased in and will affect the largest schemes first) |
| Collective defined contribution – the PSA 2021 introduces a new type of pension scheme. This will be a money purchase arrangement in which member and employer contributions are invested collectively. | Own-trust – early 2022 Multi-employer – 2023 onwards |
Our Insight (Pensions law is changing on 1 October 2021 – are you ready?) provides more detail on the Pension Schemes Act 2021 and 1 October 2021 changes and the key impacts and actions for trustees and scheme sponsors.
Click here for all of our blog posts on the Pension Schemes Act 2021.
About the author(s)
Ian is a London-based professional support lawyer (PSL) legal director. Ian is a member of our pensions and combined human resource solutions (CHRS) teams. He works with clients to solve their employment and pensions law issues. Ian maintains a particular focus on 'crossover' issues that benefit from his understanding of both areas of law.
Ian Chapman-Curry
Ian is a London-based professional support lawyer (PSL) legal director. Ian is a member of our pensions and combined human resource solutions (CHRS) teams. He works with clients to solve their employment and pensions law issues. Ian maintains a particular focus on 'crossover' issues that benefit from his understanding of both areas of law.