TPR to finalise CDC code by 1 August; work to tackle pension scams continues

The Pensions Regulator (TPR) has confirmed that it is on track to finalise the collective defined contribution (CDC) code of practice by 1 August 2022, while further work on the issue of pension scams will be published “in due course”.

Speaking at the Pensions Age Northern Conference 2022, TPR lead investment consultant, Fred Berry, confirmed that TPR has been analysing industry feedback following its consultation on the draft code of practice earlier this year.

Industry experts previously urged TPR to publish a finalised code to be published after regulations for CDC schemes were introduced to parliament, to allow employers considering this option to prepare ahead of applications opening in August.

Berry confirmed that TPR is working to a deadline of “no later than the first of August to get the code finalised and in place”, which is expected to allow Royal Mail to meet its commitments to launch a collective scheme by the end of the year.

He also suggested that there is potential for the CDC framework to develop “quite quickly”, echoing the Pensions Minster’s ambition to potentially extend the CDC framework to include other types of pension schemes.

“Having a CDC code in place for single and connected multi-employer schemes will be a benchmark for future entrants into these markets,” he stated.

“We also expect that the market framework for CDC schemes could develop quite quickly and, as appropriate, we will look to update the code to include non-related multi-employer schemes and further commercialisation models as necessary.”

Berry also said that the regulator is keen for the government to introduce a similar statuary regime for the superfund market, suggesting that this would be a “positive addition” to the market.

Alongside the updates on CDC and superfund markets, Berry reflected on TPR’s recent victory against pension fraudsters, stressing that “this sort of crime is appalling”, with TPR continuing work to assess the scale of pension fraud.

“It’s devastating for victims and frankly, a blight on the pensions industry and something that we are very keen to stamp out,” he continued.

“At TPR we lead work at a strategic level on understanding the wider problem of scams, fraud and criminal activity and, admittedly, it’s a difficult area to fully understand and assess.

“We at TPR will continue our focus on improving the reporting of scammers so that we can really understand the scale of the issue.”

In particular, he confirmed that the regulator has been working with the National Fraud Intelligence Bureau to review the nature and breadth of the pension scams and to produce a threat assessment, which will outline the scale of the issue suggestions on what might be done about it.

“We will publish that in due course,” he confirmed, clarifying that it is a “highly complex and sophisticated” threat.

More broadly, Berry also stated that whilst the regulator will continue to show regulatory flexibility and support during the current period of economic pressure, duties remain, and trustees are expected to show continued diligence and oversight.

“We will not be relaxing our stance because circumstances are challenging,” he stated.

“We will continue to be tough on those that we need to be tough on, for example, scammers, fraudsters, criminal gangs, and they should all be mindful of our powers and availability and willingness to prosecute or use our regulatory powers.”

In particular, Berry emphasised that there is “no excuse” for trustees not to work to get their pension scheme ready for the introduction of pension dashboards.

“We will be supportive and pragmatic, but where we see intentional non compliance will be assertive,” he said.