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Pensions Insights March 2025

28 March 2025

In our monthly e-alert, Pensions Insights, we give you our take on the latest highlights in the world of pensions law and policy.

Case Law
M Rose Construction Ltd v The Pensions Regulator – First Tier Tribunal directs TPR penalty be varied to £0

The case involved an appeal against a penalty levied by TPR for non-compliance with auto-enrolment requirements by a micro-company formed in November 2018 which had no employees until 2023. 

The Pensions Regulator sent various communications to the company from 2023 reminding it of the requirements to comply now that it had employees.  As no response was received to the these TPR issued a Compliance Notice and subsequently a Penalty Notice of £400 for failing to comply with automatic enrolment duties in respect of two employees.

The company, through its accountant, cited personal difficulties, including a family bereavement and the impact of the COVID-19 pandemic, as reasons for the delay in compliance and appealed the Penalty Notice.

The appeal was allowed, and the penalty was varied to £0 on the basis that TPR failed to consider the company's circumstances  (including its small size, newness, and the impact of the pandemic and bereavement) and its rigid approach ignored the company's efforts to comply and the underlying purpose of the regulation.

The judge found that TPR acted unfairly by not reviewing the penalty in light of the company's situation.

 

New Law
Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) Order 2025

This Order specifies the earnings percentage used to calculate the levy ceiling and the amount of the levy ceiling for use in relation to the Pension Protection Fund in the financial year beginning on 1st April 2025.

Article 3 specifies that the increase in the general level of earnings for the period from 1st August 2023 to 31st July 2024 is 4% and accordingly, article 4 specifies that the levy ceiling for the financial year beginning on 1st April 2025 is £1,403,184,443.44.

The revised levy ceiling comes into force on 31 March 2025

News
Defined benefit trust-based pension schemes research: Report of findings from the 2024 survey

TPR has published a report which summarises results from the 2024 survey of trust-based occupational defined benefit pension schemes which covered a range of topics including long-term planning, discretionary benefits, investment in UK assets,  Environment, Social and Governance (ESG), The Pensions Regulator’s (TPR)  General Code of Practice, pension scams and pensions dashboards.

Key findings included that:

The majority of schemes had a long-term objective, and this was typically to buy-out.

One in five schemes were attracted to consolidation and one in eight said they would be likely to enter a Public Sector Consolidator if one were created.

Most schemes offered discretionary benefits1, but few had provided them recently.

Over a third of schemes had UK investments in private equity, infrastructure, renewables or venture capital, although only a small proportion planned to increase investment in the next year.

Awareness of TPR’s General Code of Practice increased since 2023 and the majority of schemes had scrutinised their processes against it or planned to do so.

Around half of schemes had dedicated time or resources to assessing climate-related risks and opportunities, similar to the 2021 survey.

Most trustees believed suspected pension scams should be reported to TPR, but few mentioned Action Fraud.

Most medium sized schemes had discussed pensions dashboards at trustee meetings and with their administrator, but fewer had decided on a route to connection.

Defined contribution trust-based pension schemes research: Report of findings from the 2024 survey.

TPR has also published a report which summarises results from the 2024 survey of trust-based occupational defined contribution pension schemes which covered a range of topics including cyber security, The Pensions Regulator’s (TPR) General Code of Practice, investment in UK assets, Environment, Social and Governance (ESG), pension scams, pensions dashboards and automatic enrolment.

Key findings included that:

The majority of schemes had a cyber security incident response plan. However, they typically relied on a third-party’s plan and a significant proportion had not assured themselves that this adequately covered and prioritised their scheme.

Most respondents were clear which scheme functions would be prioritised in a cyber security incident and were confident they knew when incidents would be reported to the trustees, but many schemes had not reviewed their cyber risk and controls in the last year.

Less than half of trustee boards received regular training on the scheme’s cyber risk or had accessed specialist cyber skills/expertise to help manage this risk.

Over one in five schemes held UK investments in infrastructure, private equity, renewables, private market long-term asset funds (LTAF) or venture capital, although only a small proportion planned to increase investment in the next year.

Awareness of TPR’s General Code of Practice increased since 2022. The majority of schemes aware of the code had scrutinised their processes against it or planned to do so.

Less than a fifth of schemes had dedicated time or resources to assessing climate-related risks and opportunities, unchanged from the 2022 survey. Consideration of other ESG factors was more widespread.

Most respondents believed suspected pension scams should be reported to TPR, but few mentioned Action Fraud.

Most medium sized schemes had discussed pensions dashboards at trustee meetings and with their administrator, and also decided on a route to connection. Half of respondents were aware of the proposed changes to the automatic enrolment eligibility criteria.

 
If you have any queries about any of the issues covered, or you require advice on a pensions related matter, please do not hesitate to contact your usual contact.
 
 

Further Reading