In this week’s update, we look at the Finance Bill 2021, which received Royal Assent, the Regulator updates on relationship supervision, regulatory initiatives and events activities during COVID-19 and the AMNT (The Association of Member Nominated Trustees) who updated their red line voting policies to take account of regulatory changes.
Finance Bill 2021 receives Royal Assent
The Finance Bill 2021 received Royal Assent on 10 June 2021 and became the Finance Act 2021. The key pension provisions include:
- Lifetime allowance: freezing of the lifetime allowance at £1,073,100 until the tax year 2025/26; and
- Collective money purchase schemes: introducing amendments to the Finance Act 2004 to allow collective money purchase schemes to operate as registered pension schemes.
Regulator update on relationship supervision, regulatory initiatives and events activities during COVID-19
The Pensions Regulator (the Regulator) has provided an update about its relationship supervision, regulatory initiatives and events activities during COVID-19.
Relationship supervision
As regards ‘relationship supervision’ the Regulator notes that:
“The pensions landscape has shifted since March 2020, and we are refocusing our supervisory regime accordingly. As the schemes we currently supervise are all at different points on our supervisory cycle, we will contact them individually to determine the next steps. If you have immediate concerns due to the ongoing situation, please contact your named supervisor to discuss.”
The Regulator will also be increasing its engagement with both scheme administrators and superfunds.
Regulatory initiatives
The Regulator also reports that regulatory initiatives which were suspended in March 2020 are expected to restart later this year. Those schemes that are selected will be contacted by the Regulator.
Events
As regards events, the Update explains that the Regulator intends to continue to provide digital-based events until it is ‘safe’ to return to venues.
AMNT updates red line voting policies to take account of regulatory changes
The Association of Member Nominated Trustees (AMNT) has updated its Red Line Voting Policies to take account of climate change, the Modern Slavery Act 2015 and alignment of CEO pension contributions with those of the workforce:
- Climate change: The updated policies expect companies to report in relation to the TCFD recommendations and require corporate lobbying to be aligned with the Paris Agreement.
- Social: there are new requirements in respect of the Modern Slavery Act 2015 and labour breaches including human rights considerations. The target for gender diversity has gone up from 25% to 33% and requires at least one of four specified board positions to be held by a woman.
- Governance: CEO pay has been linked to sustainability targets and there is a new Red Line aligning CEO pension contributions to that of the company’s workforce.
The Red Line Voting initiative was set up by the AMNT to allow pension schemes to become more active in asset ownership and in improving the environmental, social and governance (ESG) of organisations. They are a set of voting instructions covering ESG issues. Schemes would need to take advice before deciding whether to implement them.
The AMNT explains that Red Line policies are used on a comply or explain policies and can be used by pension schemes for engagement purposes to hold fund managers to account and as a reporting framework for implementation statements.