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Welcome to your weekly update from the A&O Shearman Pensions team, covering all the latest legal and regulatory developments in the world of workplace pensions.
Summary
- TPR's new administration guidance includes more detailed requirements for schemes: formal policies, prioritising data, stronger IT/automation/cyber focus, and tighter administrator engagement and oversight.
- FCA targeted pensions support proposals go ahead; application to trust-based schemes remains under review
- TPR: examining investment in growth assets and schemes' digital transformation.
- Plus: new stewardship and voting guidelines and a pensions dashboards update.
TPR: updated administration guidance
The Pensions Regulator (TPR) has published new guidance outlining steps that trustees, scheme managers and administrators should take to comply with the administration module of its Code of Practice. The guidance applies to both DB and DC schemes, replacing a previous DC-only version.
What are the key points from the new guidance?
- Written administration policy: TPR expects trustees to have a written administration policy in place. The Code of Practice says governing bodies should develop a strategy for the long-term administrative objectives of the scheme, but the expectation that this will be a written document is new and the guidance gives a list of items the policy should cover.
- Data as a 'strategic asset': Building on recent messaging, TPR stresses that trustees should take an active role in the oversight of the management of member data and not treat it as an 'operational afterthought'. TPR suggests that it is good practice to have a formal data management strategy in place, covering quality and security considerations, responsibilities, and documenting policies and processes for organising, receiving, storing, sharing and improving data. The guidance also includes suggested data security controls.
- Stronger focus on IT, automation and cyber resilience: Trustees should understand what IT systems are being used and seek evidence to ensure that these systems are adequate to meet their scheme's current and anticipated requirements. Tasks should be automated to reduce the risk of manual error and deliver economies of scale. Trustees should have a good overview of their scheme's cyber resilience, in line with TPR's cyber security guidance. The new guidance also gives more detailed expectations in relation to business continuity and disaster recovery plans.
- Administrator contracts and oversight: The guidance expands the granularity of what trustee-administrator arrangements should cover, including: robust contractual terms; appropriate reporting (the guidance includes a list of items that administration reports should cover as a minimum); performance measures; ensuring experience, qualifications, training and development; and a clear and well-documented administration procedure manual, which incorporates quality assurance and is updated regularly.
- Trustees should be inviting appropriate representatives from their administrator to attend relevant board meetings and allocating appropriate time to discuss administration matters.
- It is good practice for administrators to routinely undertake trend analysis using data collected from complaints, incoming calls, and member interactions on their web portals. This analysis forms a key part of the internal feedback loop and drives service improvements.
What should trustees do in response to the new guidance?
Trustees should review the new guidance with an eye to identifying further steps that could be taken to improve governance of scheme administration – schemes undertaking their own-risk assessment may wish to build some of these steps into their future plans.
Consultation response on targeted support
The government and the Financial Conduct Authority (FCA) have announced that they are taking forward proposals for targeted pensions and investment support. This will allow FCA- and PRA-authorised firms to make pensions recommendations that are designed for groups of consumers with similar characteristics and circumstances (in essence, a half-way house between providing generic information and guidance, and providing full, personalised advice). This is expected to come into effect in early April 2026.
How does targeted support affect occupational pension schemes?
The original consultation discussed whether and how the proposals could be applied to trust-based schemes. The consultation response does not address this point directly but suggests this is still under consideration, stating: 'the government will review how targeted support operates alongside wider policy developments across the pensions landscape including Guided Retirement. We will seek to ensure that all pension members are offered good quality support to manage their pensions, regardless of how their pension provider is regulated'.
Read the consultation response.
TPR initiatives on growth asset investment and digital transformation
TPR has launched an initiative examining how DB and DC schemes approach investment in private markets and infrastructure. It is seeking to understand the opportunities available and the barriers, with an emphasis on UK investment. TPR is capturing market intelligence through direct engagement with industry, beginning with key industry investment consultancies and pension schemes, a range of industry representative bodies and potentially supply-side providers. Findings will be published in a market oversight report next year.
TPR has also published a blog post discussing how it is encouraging schemes to use data and technology to deliver better outcomes. It gives an update on the progress of the Data and Digital Industry Working Group, which has developed three overarching objectives: action-oriented, targeted guidance; aiding responsible adoption of AI underpinned by high-quality data; and clear, consistent data standards enabling seamless communication across the industry and reducing duplication. TPR will explore opportunities for volunteers to join specialist subgroups next year.
Pensions UK Stewardship and Voting Guidelines
Pensions UK has published updated Stewardship and Voting Guidelines. This year's version includes a new section on key emerging themes; more detail and strengthened voting recommendations in relation to AI and cybersecurity; discussion of potential collaborative stewardship options and emerging industry initiatives; updates in response to policy and political change around ESG; and the introduction of pass-through voting as a possible option for schemes seeking to exercise shareholder rights directly.
Dashboards update
The Money and Pensions Service (MaPS) has produced its latest progress update report on pensions dashboards. 700 pension providers and schemes, representing 75% of records in scope, have completed connection; state pension data is also now accessible. MaPS is 'confident that connection remains on course'. The update discusses ongoing user testing, reporting that results have been 'broadly positive' but a range of 'pain points' and issues have been identified that MaPS is working to resolve. MaPS also emphasises the continued commitment to private sector dashboards and the Pensions Dashboards Programme (PDP) is working closely with potential dashboard providers, DWP and the regulators on this.
Read the progress update report.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
