Hogan Lovells

Key Dates

Consultation paper, “Improving outcomes for members of defined contribution pension schemes”, and draft regulations issued on 11 September 2020.

Consultation closes on 30 October 2020.

Amendments to regulations expected in force on 5 October 2021.

The draft Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021

Consultation paper, "Investment Innovation and Future Consolidation", issued in February 2019.


Summary

The DWP has issued a response to its February 2019 consultation on investment innovation and future consolidation.  The paper also proposes further measures aimed at improving outcomes for members of defined contribution (DC) schemes and includes consultation on draft regulations and statutory guidance.

Charge cap

The DWP is reviewing the scope and operation of the charge cap for auto-enrolment default funds and intends to report towards the end of 2020.

The review follows a call for evidence (which closed on 20 August 2020) on specific elements of the charge cap.

Disclosure of asset value: all occupational schemes

Enhanced investment reporting for all relevant schemes

The DWP proposes amending regulations to require that, with effect from 5 October 2021, all relevant schemes must:

New value for members assessment and consolidation

Consolidation of schemes

Diversification, performance fees and the default fund charge cap

The DWP proposes, with effect from 5 October 2021 to:

The DWP is reviewing the scope and operation of the charge cap for auto-enrolment default funds and intends to report towards the end of 2020.

The list of costs and charges has been amended to clarify that when applying the charges cap, trustees should look through all open-ended funds and all UK listed closed-ended funds and international equivalents.

The DWP has decided, at the current time not to proceed with its proposal to require very large schemes to include their policy on illiquid assets in their SIP.

Updates to statutory guidance on costs and charges

The existing statutory guidance will be amended to clarify that:

With profits schemes

Closed self-select funds

Wholly insured schemes

Reporting of costs and charges: statutory guidance

Statutory guidance will be amended to provide additional clarity on how costs and charges information should be set out. 



Date Accessed: 03/12/2021