Your A-Z Guide To Key Pensions-Related Developments In 2022

• Published date: 03 February 2022
• Subject Matter: Employment and HR, Retirement, Superannuation & Pensions
• Law Firm: Herbert Smith Freehills
• Author: Ms Samantha Brown, Rachel Pinto, Michael Aherne and Tim Smith

Happy New Year to all our readers!

As you get back to your (virtual) desks, we have prepared an A-Z summary of the key pensions-related developments you can expect in the coming year.

Auto-enrolment - This year marks the 10th anniversary of the introduction of automatic enrolment (can you believe it!). This grand social experiment has proved to be very successful in getting millions more people to save in workplace pension scheme but we can expect continued calls for the Government to extend auto-enrolment to those currently excluded and to increase the minimum contribution rates.

Benefit statements - Automatic enrolment schemes that provide money purchase benefits only will be required to issue the new simpler benefits statements from 1 October 2022.

Collective DC - Legislation enabling the creation of Collective DC schemes in the UK is due to come into force on 1 August 2022.

Dashboards - Work on the development of the digital architecture for pension dashboards will continue with a view to the first wave of schemes being required to submit data in 2023. The DWP is due to consult shortly on legislation which will set out the phasing process and the data schemes will be required to submit. It is important schemes make progress preparing their data this year to ensure they are dashboard ready.

ESG - The focus on climate and other ESG related risks will continue in 2022 as the climate risk monitoring and reporting requirements are extended to '1billion+ schemes and as more work is done to understand ESG risks and their potential impact on schemes' investment strategies and on scheme sponsors.

Funding - The DWP is due to consult on new funding and investment regulations in the Spring. This will be followed by the consultation on the Regulator's new DB Funding Code. Read more

GMP equalisation - Most schemes are still working towards being in a position to equalise members' benefits for the effect of GMPs. With issues such as data, assumptions, tax and forfeiture all needing to be considered before benefits can be equalised, expect progress to continue to be slow but steady in 2022.

High inflation - 2022 is set to be marked by higher inflation than we have seen for many years. Trustees will need to consider what, if any, steps to take to adjust to this new economic environment.

Illiquid investments - The Government is likely to continue to encourage greater investment in illiquid investments by UK pension schemes including via the new Long-Term Asset Funds...