A welcome ‘first foot’ for 2024 from the Pensions Regulator as the General Code of Practice is published

The Pensions Regulator (“TPR”) has published its General Code of Practice. The long-awaited code was laid before parliament on 10 January and is expected to come into force on 27 March this year.

Are there any surprises?

As a reminder, TPR consulted on combining 10 of its existing Codes of Practice into one and the final version of the General Code is largely unchanged from the March 2021 draft.

One significant change made by TPR is on the timing of the Own Risk Assessment (“ORA”). After documenting their first ORA, Trustees must document subsequent ORAs at least every three years (and not annually, as originally proposed), with each element being assessed in accordance with a scheme-specific timetable. The ORA can be a collation of other relevant documents rather than a stand-alone document.

The remuneration policy, whilst still required, has been pared back, and there is no longer a requirement to publish it online.

What should Trustees do now?

The General Code of Practice advises that systems of governance should be ”proportionate to the size, nature, scale, and complexity of the activities of the scheme”. However, this does not mean that smaller schemes can ignore the impact of the code.

Some schemes are well prepared with a draft Effective System of Governance (“ESOG”) and ORA ready for fine tuning now that the General Code has been published. However, the industry has had a busy year dealing with the aftermath of the Liability Driven Investment crisis, considering the abolition of the lifetime allowance and digesting the Mansion House reforms, so it is understandable that some schemes may not be as well prepared for the code coming into force in March.

Trustees should compare their scheme's existing governance frameworks against the ESOG requirements and identify any gaps to be addressed. The pensions team at Burness Paull is ready to help you deal with this increased governance burden in a proportionate manner.

If you would like to discuss how we could help please contact us.