Hogan Lovells

Key Dates

Response to consultation and two sets of final statutory guidance issued by the DWP on 21 June 2021.

Consultation “Incorporating performance fees within the charge cap” issued in March 2021.

Consultation on draft regulations and statutory guidance to deliver better value for money for DC members issued on 11 September 2020.

The draft Occupational Pension Schemes (Administration, Investment, Charges and Governance)(Amendment) Regulations expected in force on 1 October 2021.

Statutory guidance “Reporting of costs, charges and other information: guidance for trustees and managers of occupational schemesand Completing the annual Value for Members assessment and Reporting Investment Returns: Guidance for trustees of relevant occupational DC schemes” both to be effective from 1 October 2021.


Summary

The DWP has issued a consultation response, revised amending regulations and two sets of statutory guidance, aimed at aspects of improving outcomes for members of defined contribution (DC) schemes. 

At the same time, the DWP issued a call for evidence on how to accelerate consolidation of DC schemes with less than £100m of assets, which it considers more likely to offer poorer value for members (VFM) than larger schemes.  The call for evidence and the DWP’s consultation response to its proposal to require schemes with less than £100m of assets to carry out an enhanced VFM assessment are considered in separate summaries.

Reporting net returns in chair’s statement (statutory guidance and amendments to regulations)

Points to note from the statutory guidance include the following.

Value for members (VFM) (amendments to regulations)

Costs of holding physical assets (amendments to regulations)

Look through costs (waiting for further policy announcement)

Costs and charges: disclosure and illustration (amendments to statutory guidance)

To address queries about how schemes should produce illustrations of costs and charges, the DWP proposed various amendments to statutory guidance.  Following consultation, the DWP has confirmed the following.

Disclosure: signatures (amendment to statutory guidance)

Default SIPs and with profits funds (amendments to regulations)

Treatment of deferred benefits (amendments to regulations, statement in consultation response)



Date Accessed: 03/12/2021