With fifteen members that include Age UK, Barnardo’s, Cancer Research UK, English Heritage, RNIB and Save the Children, Charities Pensions Club (CPC) is dedicated to supporting pension professionals in the charity sector by offering a platform for discussing hot topics.
The CPC 2022 Member Benchmarking Data Report shares key insight into the current pension landscape, shedding light on how charity pension managers can oversee schemes more efficiently and cost-effectively.
Most CPC members work as the only pension specialist in their organisation, so this year’s Member Benchmarking Data Report provides in-depth advice from the club’s partners CMS and Isio, two high-calibre companies. Whilst CMS’s pensions team has been listed in the top-tier of the UK legal directories for over a decade, Isio is a leading independent provider of actuarial consulting, pensions administration, investment advisory, employee benefits and wealth management services.
Chloe Scragg, Director at Charities Pensions Club, said: “The support we receive from CMS and Isio is invaluable, as it gives our members access to expert advice that benefits the charities as a whole as well as their individual employees. Our next events are the CPC Joint Partner Meeting on Thursday 15th September and the CPC Autumn Meeting on Thursday 10th November. If you’re a pension professional working in the charity sector and would like to gain access to competitive intelligence and targeted networking opportunities, please visit our website and get involved.”
As official partners of CPC, together CMS and Isio provide core insight into legal issues and developments affecting UK pension schemes. Below are selected excerpts from the 2022 Member Benchmarking Data Report, which are designed to help third sector pension professionals achieve best practice.
The representatives from CMS were Neil Smith, Partner, and Kate Freeman, Senior Associate. They said:
“The coming year looks like it will be yet another busy one for pension schemes. With the impact of the Pension Schemes Act 2021 still being rolled out, other new legislation, and guidance from The Pensions Regulator (TPR) expected this year, there will be plenty to do. For example, TPR’s new Single Code of Practice is expected to come into force this year. This threatens to be a huge document, as the current draft is over 150 pages. While the original aim was to consolidate material from ten of TPR’s existing codes of practice, the Code has now been expanded to include extra detail and some entirely new sections.
“Also, 2022 should be the year when pension schemes finally get a proper understanding of what they will need to do to facilitate the Government’s plan for pensions dashboards, with consultation on detailed new regulations due in the winter. All registered UK occupational pension schemes with active or deferred members will have to connect to the new dashboard digital architecture in stages, by size of scheme.
“In addition, ethical investing is naturally something that charities are likely to take an interest in. The Government is keen to expand the obligations on pension trustees to take account of environmental, social and governance factors (ESG). The recent Butler-Sloss case may have brought welcome clarity to the trustees of charities regarding ethical investing, but it is important to note that the ruling did not apply to pension schemes. While further guidance from the courts on the principles which pension scheme trustees should consider in relation to ESG would be very welcome, it is not clear if or when the courts may have the opportunity to provide this guidance.
“To help them identify which issues are most relevant to them and should be highest priorities on their lists, employers and trustees should speak to their advisers. This should help to identify where decisions are needed and which actions are most urgent.”
The representatives from Isio were Gemma Woodall, Director, and Jen Norris, Senior Manager. They said:
“We are expecting the trend towards scheme consolidation to continue, given the cost savings and reduction in management time. The Government has indicated its desire for consolidation of the defined contribution (DC) pensions market, and onerous new requirements have been introduced for own-trust DC schemes aimed to ‘nudge’ smaller DC schemes into a consolidation vehicle, often a Master Trust.
“The impact of the cost-of-living crisis can’t be ignored, and individuals will need to focus on short-term financial decisions. Employees may start to look for ways to cut back and consider reducing DC contributions or opting out completely, which could significantly impact their long-term savings. This could be the right decision – but it needs to be informed. Financial wellbeing support is becoming a must-have for employers, rather than a ‘nice to have’. Organisations will need to balance this additional demand for support with the impact of the crisis on their funding, costs, services and customers.
“We are also seeing a trend of pension schemes committing to a net carbon zero target by 2050, and starting to explore interim targets. There is also an increased focus on social issues such as modern slavery, and diversity and nature issues such as deforestation and biodiversity loss. Increased interest from DC scheme members to invest sustainably means almost all large DC own-trusts and Master Trusts now embed ESG factors into their investment philosophy for the default strategy.
“Finally, for defined benefit pension schemes, consideration of long-term objectives will likely be a particular focus over the next year. The new funding code includes a requirement for pension schemes to have a long-term funding target, and a plan to reach that target within a certain timeframe. A consultation was recently opened with drafting that’s surprisingly prescriptive, which could be a bit of a straight-jacket for trustees.”
For more information about Charities Pensions Club, please visit www.charitiespensionsclub.com