Pensions: what's new this week - 9 May 2023

Welcome to your weekly update from the Allen & Overy Pensions team, covering all the latest legal and regulatory developments in the world of workplace pensions. This week we cover topics including:  Act prohibiting indemnification for dashboards penalties; Extension of pension scheme clearing exemption; The Gender Pensions Gap: what it is and how to fix it – 23 May 2023.

Act prohibiting indemnification for dashboards penalties

The Pensions Dashboards (Prohibition of Indemnification) Act 2023 has received Royal Assent. The Act prevents trustees and managers from using pension scheme assets to indemnify themselves against penalties imposed by the Pensions Regulator (TPR) for breach of the pensions dashboards requirements.

The Act extends existing provisions in the Pensions Act 2004, which prevent the use of scheme assets for reimbursing, or providing for reimbursement of (for example, by paying for insurance), certain penalties. Those provisions now include penalties imposed by TPR for non-compliance with the Pensions Dashboards Regulations 2022, which set out requirements for schemes in relation to connecting with pensions dashboards. If trustees/managers use scheme assets to reimburse themselves, this will be an offence and they will be subject to a potential civil penalty, fine and/or imprisonment, unless they can demonstrate that they took all reasonable steps to secure compliance.

Read the Act.

Extension of pension scheme clearing exemption

Regulations extending the exemption of UK pension funds from the clearing requirements for over-the-counter derivatives under UK EMIR will come into force on 12 June 2023. The exemption is currently due to end on 18 June 2023, but will be extended by two years. This change relates to the UK clearing exemption only; the similar EU exemption for European pension scheme arrangements is still currently due to end on 18 June 2023. The regulations also extend exemptions from the clearing obligation and certain risk mitigation requirements for derivatives contracts held between counterparties in the same corporate group by three years, to 31 December 2026.

Read the regulations.

The Gender Pensions Gap: what it is and how to fix it – 23 May 2023

The Gender Pensions Gap – the difference between the pension incomes that men and women can expect at retirement – is estimated to be twice the size of the Gender Pay Gap. Why is that, and how can we close the gap? Join us at our offices on Tuesday 23 May 2023 when we will be welcoming Legal & General Investment Management’s (LGIM) Stuart Murphy, Co-Head of DC, and Alexandra Miles, Senior DC strategist, to discuss the gap and what can be done to address it.

Sign up here.

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