As change ripples through the pensions sector, Vidett, the UK’s leading professional trustee firm, outlines some key transformations that companies, pension schemes, and trustees could face in the coming year.
- The general code of practice: Pension schemes will need to prepare for the much-anticipated arrival of The Pensions Regulator’s (TPR) general code of practice which will be introduced from 27 March.
- Professional trusteeship mandate: Could we see the need for professional trustees to be appointed to all schemes? It would mark an industry-wide shift if we do – and drive the need for the recruitment of even more professional trustees.
- EDI focus: We think TPR will advance its equality, diversity and inclusion (EDI) strategy, gathering more EDI data and perhaps even mandating evidence of embedded EDI practices from all schemes by the year end.
- Emulating Australian super funds: With Australian super funds typically outperforming UK pension funds[i], we think defined contribution (DC) master trusts are likely to mirror their success by embracing technology and refining their investment processes.
- TPR and FCA merger: We predict 2024 will see a move towards the merger of TPR and the Financial Conduct Authority (FCA) to create a single, unified regulatory body for the pensions industry.
- Refined value for money (VFM) framework: If this merger goes ahead, we are likely to see clearer and more targeted VFM frameworks.
- Evolution of chair’s statements: In 2024, chair’s statements could become shorter or non-mandatory, changing reporting requirements.
- More environmental and climate-based decision making and focus for all schemes: Across all pension schemes, we predict greater focus on incorporating environmental, social, and corporate governance as well as the climate and nature related taskforces.
- Single statutory objective: 2024 could witness the introduction of a single statutory objective for DC retirement provision, encompassing accumulation and decumulation and a targeted retirement income.
- Technological integration: We believe there will be increased reliance on technology, potentially leveraging applications to ensure more streamlined pension-related processes.
In an ever-evolving landscape, Vidett is ready to help schemes address the changing demands and expectations of the pensions industry in 2024.