On February 11, 2021, the Pension Schemes Act 2021 has received Royal Assent. The Act is divided into 6 parts dealing with following:
- Part 1 deals with Collective Money and Purchase Benefits
- Part 2 deals with Collective Money and Purchase Benefits : Northern Ireland
- Part 3 deals with Pension Regulator
- Part 4 deals with Pension Dashboard
- Part 5 deals with Further Provisions relating to Pensions Schemes
- Part 6 deals with Extent and Commencement
Parts 1 and 2 of the Act provides for a framework for the operation and regulation of Collective Money Purchase Schemes in the UK.
Part 3 introduces measures intended to strengthen TPR’s powers and improve the information available to it, to better enable it to protect DB scheme members’ savings. The Act introduces two new grounds for TPR to issue Contribution Notices in respect of an underfunded DB scheme. It also allows for a new DB scheme notifiable events regime. The Act will impose new duties on trustees of DB schemes to have in place a funding and investment strategy which must be kept under review.
Part 4 create a legislative framework for pensions dashboards. The Act paves the way for the development of pensions dashboards and the mandatory provision of data by pension schemes. Dashboards will offer the facility for members to see all of their pensions savings in one place, with a hope for improved member engagement as a result.
The Act brings two new offences in relation to DB schemes: avoidance of an employer debt, and conduct risking accrued scheme benefits. These carry the risk of a criminal penalty of an unlimited fine and/or imprisonment of up to seven years. Alternatively, TPR could issue a civil fine of up to £1 million.
