On 17 March, the Pensions Regulator (TPR) published a draft of its new single modular code of practice. This brings together 10 of TPR’s existing ‘codes of practice’ and some associated guidance, alongside supplemental material to complete the UK’s implementation of the requirements of the Institutions for Occupational Retirement Provision (IORP) Directive. TPR’s press release makes it clear that this is a work in progress, as today’s publication marks the first phase only.
In this first phase, TPR has focused on existing codes that are largely concerned with administration and governance matters for defined benefit, defined contribution and Public Service schemes. The five remaining codes will be brought into the new Code ‘in due course’. The draft DB funding code – on which TPR will consult in the second half of the year – will be in the same style and form part of the new code. Future consultations will cover areas such as master trust authorisation and supervision and collective defined contribution schemes.
Being largely concerned with consolidating and codifying existing codes and some of their associated guidance, much of the content is familiar – although the intention is to present it in a way that is ‘easier to access, understand and act upon’.
Perhaps of greatest interest are the new elements. Unsurprisingly, these include matters such as climate change and stewardship, alongside greater content on cyber controls and the maintenance of IT systems. The new, but expected, aspects of governance arising from the IORP Directive have also been incorporated, such as trustees’ duties to:
The new Code is ‘modular’, which is intended to enable users to navigate easily between various sections and related topics through the web-based version. David Fairs, TPR’s Executive Director for Regulatory Policy, Analysis and Advice, states that it should make it easier for scheme stakeholders “to distinguish between legal duties they must meet and what we expect should be done to comply with those duties”.
The consultation will run to 26 May 2021 and be accompanied by a ‘virtual workshop’ to allow trustees, advisers and pensions professionals to discuss the content in more detail. It seems likely that a final version of the Code will be published in the autumn.
