The long-awaited general code of practice (the “General Code”) from the Pensions Regulator (“TPR”) has been published and was laid in Parliament yesterday. The General Code is expected to come into force towards the end of March 2024.

What is the General Code?

The draft General Code (then known as the “Single Code”) was issued in March 2021, at the start of a consultation period which ran until 26 May 2021. The General Code was initially expected to come into force in autumn 2022 but was delayed due to various factors.

The new General Code (general-code-laid-January-2024.pdf) updates and combines the following 10 existing codes of practices:

  • Reporting breaches of the law
  • Early leavers
  • Late payment of contributions (occupational pension schemes)
  • Late payment of contributions (personal pension schemes)
  • Trustee knowledge and understanding
  • Member nominated trustees/member-nominated directors putting arrangements in place
  • Internal controls
  • Dispute resolution reasonable periods
  • DC code
  • Public service code

The General Code is still set out in the format of 51 short, topic-based modules, with the aim of making it easier for trustees and other governing bodies of pension schemes to understand and act on TPR’s expectations.

The General Code also incorporates elements from the Occupational Pension Schemes (Governance) (Amendment) Regulations 2018, in particular the requirement for trustees and governing bodies to have in place an effective system of governance (also known as “ESOG”), and to carry out and document an own-risk assessment (also know as “ORA”) of their ESOG. The General Code sets out in some detail TPR’s expectations for the own-risk assessment, but also helpfully recognises that the ORA will need to be in proportion to the size, nature, and complexity of the scheme. Most schemes will be required to complete their first ORA within 12 months of the date on which the General Code comes into effect. 

What's new?

It is clear that the General Code has been updated to reflect the passage of time and the changes that have come about in the period between the General Code first being issued in March 2021 and today, including updates relating to ESG, cyber security, investment decisions, governance, climate change and trustee knowledge and understanding.  There is also a greater emphasis on diversity and inclusion.  We will be updating our checklist to reflect the key changes to the General Code, so please get in touch if you would be interested in receiving a copy of this.

TPR’s Interim Director of Regulatory Policy, Analysis and Advice, Louise Davey, has said: “Our new general code is an opportunity for governing bodies to make sure their schemes meet the standards of governance we expect, and savers deserve. It means there is no excuse for failing to know what TPR expects of them.”

Louise Davey has also warned that “Those that do not meet the code’s expectations should take action to improve their scheme’s governance.” Adding that governing bodies should “at the very least […] be aware of where they fall short of our expectations and have clear and realistic plans in place to address those shortcomings.”

Next steps for Trustees

With the General Code expected to come into force before the end of March, and with most schemes required to then complete their first ORA within 12 months of that date, this should be high on trustee agendas.  Evaluating their scheme's ESOG and identifying any gaps or areas which may require further thought will be a key action for schemes - putting in place robust policies and procedures that meet the requirements of the new Code will be key.  We are very well placed to help schemes with this process - should you need any assistance please contact me or your usual Burges Salmon Pensions team contact.

This article was written with assistance from Sinead O'Donoghue and Henry Dalton