The personal pensions regime

The regulation of personal pensions

The Financial Conduct Authority (FCA) has a wide regulatory role across financial markets. Any firm that carries out certain types of activities (known as regulated activities) in the UK must be directly authorised by the FCA and will fall within its regulatory ambit.

Regulated activities are set out in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 and include the activity of establishing, operating and winding-up a personal pension scheme or stakeholder scheme (SI 2001/544, art 52).

While the task of regulating personal pension schemes falls primarily on the FCA, the Pensions Regulator plays a complementary role insofar as:

  1. those schemes have direct payment arrangements in respect of one or more scheme members who are employees, and

  2. the regulatory function in question focuses on:

    1. protecting the benefits of members of such schemes, and

    2. promoting the good administration of work-based pension schemes

For further information on the respective roles of the Pensions Regulator and the Financial Conduct Authority (FCA), areas of overlap in their regulatory work, and the

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DWP to evaluate pension scheme climate disclosure regime as part of government’s modernisation of climate disclosure and transition planning in UK financial markets

As part of its efforts to modernise the UK’s sustainability reporting framework, the government has introduced three consultations intended to “unlock billions in clean energy investment”. In doing so, the government is consulting on how to implement its manifesto commitment to mandate UK-regulated financial institutions (including banks, asset managers, pension funds and insurers),  as well as FTSE 100 companies,  to develop and implement credible transition plans that align with the 1.5C goal of the Paris Agreement. The government sees transition planning as a vital part of its commitment to secure the UK’s position as the green finance capital of the world. Notably, one consultation from the Department for Energy Security and Net Zero, seeks views on how the government should implement this commitment by ensuring an orderly transition aligned with global climate goals, aiming to enhance transparency to facilitate efficient capital allocation, enabling companies to seize opportunities from the global net zero transition, and bolstering the growth and international competitiveness of the UK’s financial services industry.  In particular, the consultation from the Department for Energy Security and Net Zero indicates that during 2025, the Department for Work and Pensions (DWP) will conduct a review of the Occupational Pension Schemes (Climate Change, Governance and Reporting) Regulations 2021, SI 2021/839, utilising evidence provided by the Pensions Regulator (TPR). The DWP regards this review as a logical starting point to assess the effects of the current climate disclosure regime (put in place following the recommendations from the Taskforce on Climate-Related Financial Disclosures (TCFD)) and to consider future steps for climate change reporting. In parallel with the TCFD review, the DWP has tasked TPR with evaluating the feasibility of transition plans within pension schemes. Accordingly, TPR is organising an industry working group, including key stakeholders and major occupational pension schemes, and is set to deliver its findings to the DWP later in 2025.

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