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UK Pensions

Year to Come 2022 and Year in Review 2021

UK Pensions Year to Come 2022 and Year in Review 2021

As part of the Year to Come, Year in Review series, our UK Pensions team has contributed a UK Pensions Year to Come and Year in Review publication. In this publication we have looked forward in predicting likely themes for 2022 and summarised the key legal developments in the pensions space for 2021.

Find out more about our Pensions advice, or read below for the top developments last year and what we expect to see in the year ahead.

UK Pensions in 2022

What will 2022 bring for pension scheme trustees and sponsoring employers?  The remaining provisions of the Pension Schemes Act 2021 are expected to come into force throughout 2022 and into 2023. These include new notifiable events and scheme funding regimes, as well as the detail on pensions dashboards. Further developments on hot topics such as climate change, consolidation and charges are also expected. Our top predictions for UK pensions law in 2022 are below, with links to further information where available.

Notifiable events:

The Pension Schemes Act 2021 includes significant changes relating to employers’ reporting obligations. The intention is to alert the Pensions Regulator and trustees at an earlier stage to financial decisions which could impact on the pension scheme. The Government has consulted on draft regulations which set out the detail of these changes and they are expected to come into force on 6 April 2022. Read more here.

Scheme funding:

The Government is expected to consult on draft regulations setting out the detail of the new scheme funding regime under the Pension Schemes Act 2021. Alongside this, the Regulator anticipates publishing a consultation on its draft code of practice. The new regime, representing the most fundamental shift since the current regime was introduced in 2005, is expected to come into force in 2022 or 2023. Read more here and here.

Pensions dashboards:

The Pension Schemes Act 2021 includes the legislative framework for pensions dashboards, the online platforms which will allow users to view information from multiple pensions in one place. The Government is expected to consult on draft regulations imminently. They will include the Government’s proposals on the staged compulsory connection of pension providers to the dashboards ecosystem, with schemes expected to start onboarding in 2023. Trustees will need to start thinking about what they need to do to get their data “dashboard ready”. Read more here.

Collective defined contribution (CDC) schemes:

The Government has consulted on draft regulations which set out the authorisation and supervision regime for CDC schemes. The proposed regime is similar to that for the authorisation and supervision of master trusts. Further progress is expected in 2022, but it remains to be seen how much interest this new type of pension scheme will generate. Read more here.

Climate change:

Unsurprisingly, climate change remains high on the agenda. From 1 October 2022, schemes with £1 billion or more in assets will be required to align their governance processes and disclosures with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. And the Government has already consulted on proposed amendments to those requirements, also expected to come into force on 1 October 2022. These changes will require trustees to measure and report on the extent to which their investments are aligned with the Paris Agreement goal of pursuing efforts to limit the global average temperature increase to 1.5°C above pre-industrial levels. Read more here and here.

Social factors:

The Government is starting to focus on other elements of ESG, having already published a consultation seeking views on the effectiveness of trustees’ current policies and practices in relation to social factors (the “S” in ESG). The consultation was an information gathering exercise which the Government said may or may not lead to new requirements for trustees, but it seems likely that changes will be forthcoming. Read more here.


Both the Government and the Regulator are looking to improve trustees’ stewardship practices (specifically, voting and engagement). The Government has consulted on draft guidance on the Statement of Investment Principles and the Implementation Statement, which focuses on the areas where existing policies and reporting are perceived by the Government to be weakest, including stewardship. Meanwhile, the Regulator’s consultation on a single code of practice (see below) also includes a module on stewardship. Read more here and here.

Judicial review of RPI reform:

In 2020, the UK Chancellor of the Exchequer and the UK Statistics Authority decided to align the Retail Prices Index with the Consumer Prices Index Including Owner Occupiers' Housing Costs. The trustees of the BT Pension Scheme, Ford Pension Schemes and Marks and Spencer Pension Scheme have brought a judicial review of this decision. Assuming permission is granted for the judicial review to procced by the end of 2021 (and it is likely that permission will be granted on at least the uncontested grounds of the case), we expect the substantive hearing to be heard in the first half of 2022. A decision is expected by the end of 2022. Read more here.


The theme of consolidation is likely to continue in 2022.  Now that the interim regulatory regime for assessing and supervising defined benefit (DB) superfunds is in place and the Regulator has added the first superfund (Clara-Pensions) to its list of superfunds which have been assessed, we may finally see the first superfund transaction in 2022. Hopefully, the full legislative and taxation framework will follow. On the defined contribution (DC) side, the Government has already published a call for evidence on barriers to greater scheme consolidation in the DC pension market, so further developments in 2022 are expected here too. Read more here.

Normal minimum pension age:

The Finance Bill 2021-22 includes provisions which will increase normal minimum pension age from age 55 to age 57 from 2028. Although the change is several years away, schemes will need to plan their communications with members and any required rule amendments well in advance. Read more here.

Pensions tax relief administration:

The Government has confirmed that low earners making contributions to net pay schemes from 2024-25 will be eligible to claim a top-up. The intention is that these top-ups will help to better align outcomes with equivalent savers in relief at source schemes. The Government has also confirmed that it intends to modernise the administration of pensions tax relief. Further details are expected to emerge in 2022. Read more here.

Annual benefit statements:

From 1 October 2022, new regulations will require DC schemes used for auto-enrolment to provide annual benefit statements not exceeding one double-sided sheet of A4 paper when printed. The Government is also expected to consult on a mandatory approach to the timing of annual benefit statements, so that all members receive their statements during a short “statement season”. Read more here.

Member guidance:

The Government has consulted on regulations that will require trustees to ensure members wishing to access or transfer their pensions are referred to appropriate pensions guidance and have either received or opted out of receiving such guidance before accessing or transferring their benefits. The intention is that the regulations will come into force on 6 April 2022. Read more here.

DC charges:

Regulations introducing a de minimis pot size (set at £100) below which flat fees cannot be charged are intended to come into force on 6 April 2022. The Government has also consulted on two further proposals: (i) a proposal to move to a single, permitted universal charging structure for use within the default fund of qualifying DC schemes used for auto-enrolment; and (ii) a proposal to remove well-designed performance-based fees from the list of charges which are subject to the charge cap.. Read more here and here.

Pensions Regulator guidance:

The Regulator has consulted on the first phase of its work on combining the content of its 15 current codes of practice into a single, shorter code. The first phase involves bringing 10 of the current codes together as one new code consisting of 51 shorter, topic-based modules. It is currently expected that the new code will become effective in summer 2022. We are also promised an updated version of the trustee knowledge and understanding code of practice. Read more.

Buy-out benefit specification exercises:

As schemes targeting buy-out progress through their journey plans, we expect a continuation of the trend to undertake early benefit specification exercises in readiness for future buy-out. These exercises can reveal administration issues (for example, under/over payment of benefits) and their early identification means that planned and cost-effective steps can be taken before approaching the buy-out market.

UK Pensions in 2021

As predicted, the Pension Schemes Act 2021 was the big news of the year for pension scheme trustees and sponsoring employers, with the new criminal offences grabbing the headlines. As usual, though, there were plenty of other developments to get to grips with in the ever-shifting world of pensions. The snapshots below provide a summary of the most important developments in UK pensions law over the year, with links to further information where available.

Criminal offences:

The new criminal offences of avoidance of employer debt and conduct risking accrued scheme benefits came into force on 1 October 2021 and apply to acts (and failures to act) occurring on or after that date. These offences are punishable by an unlimited fine or up to seven years’ imprisonment (or both). The Regulator can also impose a civil penalty of up to £1 million on individuals who are party to such acts (including those who knowingly assist in the act). We think properly managed businesses and responsible directors have little to fear from the new criminal offences. However, it is important to know about the risk of action by the Regulator and consider the potential impact on the scheme when taking financially significant decisions. Read more here and here.

New contribution notice powers:

The Pension Schemes Act 2021 includes several changes relating to contribution notices (CNs). CNs can be issued by the Regulator as a means of imposing funding liabilities on employers who sponsor DB pension schemes, as well as those connected or associated with such employers. The changes include two new grounds for issuing a CN (the employer insolvency test and the employer resources test), an amendment to the reasonableness criteria for issuing a CN, a change to the relevant time for calculating the amount due under a CN and new sanctions for failing to comply with a CN. Potential targets should familiarise themselves with these changes to the CN regime. Read more here.

Other changes to the Pensions Regulator’s powers:

Several other changes aimed at strengthening the Regulator’s powers came into force on 1 October 2021, including a new civil penalty of up to £1 million for failure to comply with the existing notifiable events regime and for the provision of false or misleading information to the Regulator or the trustees, and an extension of the Regulator's information-gathering powers. Read more here and here.

Climate change:

New requirements for occupational pension schemes to align their governance processes and disclosures with the TCFD recommendations came into force for schemes with £5 billion or more in assets and authorised master trusts on 1 October 2021. Amongst other things, trustees in scope must carry out scenario analysis, calculate and use metrics and measure performance against trustee-set targets. Read more here.

Pension scheme transfers:

In order to tackle the risk of scams, the Government included provisions in the Pension Schemes Act 2021 designed to limit members’ statutory right to transfer their pension benefits to another pension scheme. The new regime came into force on 30 November 2021, with trustees now required to ensure one of two conditions is met before a transfer can proceed. This gives trustees a valuable weapon in the fight against scams, but it is something of a double-edged sword. The regulations place new and potentially onerous obligations on trustees, with the risk of member complaints if they get it wrong. Read more here.

Value for members in DC schemes:

New requirements which came into force on 1 October 2021 mean that trustees of DC schemes with under £100 million of assets, which have been operating for 3 or more years, must carry out and publish a more detailed value for members assessment. In addition, trustees of all DC schemes, regardless of asset size, must now calculate and publish the return on investments from their default and self-select funds, net of transaction costs and charges. Read more here.

Rectification court cases:

There has been a stream of cases to the High Court to correct drafting errors in historic scheme rules. Most are clear cases where the parties agree to a short-cut procedure called summary judgment. There have, however, been some contested cases such as the recent Mitchells & Butlers case.

Explore our Year to Come 2022 and Year in Review 2021 series across 20+ jurisdictions and a number of legal topics.

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