The Pension Regulator’s New General Code published in January (the General Code) is coming into force on Thursday this week (Regulations have just been published on Tuesday this week confirming 28th March is the effective date of its implementation, not 27th March as the pensions industry had widely understood). 

Recap of the key actions

As noted in our previous article regarding the General Code (The new General Code of Practice is here and there are some key actions for governing bodies (burges-salmon.com), the key actions for trustees and governing bodies are:

• to ensure there is an effective system of governance (also known as “ESOG”) in place – this requirement has existed since January 2019 so the Pensions Regulator (TPR) expects that most schemes will already have an ESOG in place. However, it should now be reviewed to see what “gaps” there are in light of the new General Code requirements. This process of review is called a “gap analysis” and the undertaking of it by trustees is viewed by TPR as the key immediate action. 
• to carry out and document an own-risk assessment (also known as “ORA”) of their scheme’s ESOG – this is to be carried out on the scheme’s own timeline, but the first ORA must be published within 12 months of the last day of the first scheme year that begins after the General Code comes into force on Thursday;
• to prepare any new scheme policies required (e.g. remuneration policy, appointment of the Chair, selection, appointment and management of advisers and providers) in order to comply with new aspects of the General Code and to review and update any existing policies to ensure they are in line with the General Code requirements. 

TPR expectations of governing bodies in terms of compliance with the General Code

TPR has had a number of guest speaking slots at various industry wide events and seminars over the last two months regarding the General Code and what it means for trustees. A key takeaway from TPR’s input at those events is that it has repeatedly clarified that it does not expect schemes to be in a position to comply right away. It has stressed that it does not expect all schemes to have a complete ESOG in place by Thursday or even shortly after that. But what it does expect, is that because the majority of what is in the General Code is not new, most schemes should already be complying with most of it. 

Crucially what TPR does expect schemes to be doing as quickly as possible, is undertaking the gap analysis mentioned above and then taking any required actions off the back of that review to address any gaps or weaknesses identified. TPR have been clear that what is key for them is not that schemes are able to comply immediately after Thursday, but that they put in place a plan as quickly as possible to address any identified gaps in the ESOG and then progress that in a timely manner. TPR’s concern is not how quickly schemes can comply with the Code requirements, but that governing bodies do not “kick the can down the road” in terms of addressing any gaps or weaknesses identified in a scheme’s ESOG.   

How we can help you with compliance with the General Code

As mentioned in our previous article, we have prepared a checklist in relation to the modules and obligations set out in the General Code.  We are also in the process of creating on online version of our General Code checklist as well. This should be available on our website in the next few weeks. 

If you are particularly interested in the ESG requirements under the General Code, we have also prepared a General Code ESG Checklist to help governing bodies identify their obligations under the Code and consider how they are met. As well as being useful as an ‘audit’ to ensure compliance, it can help with knowledge and understanding requirements since we have brought the requirements together in an accessible form.

In addition, we have also now created different iterations of our checklist to address how we think the General Code applies to different categories of pension schemes including: public service pension schemes; SSAS schemes (DB and DC); and DB schemes with less than 100 members. Again, if any of these iterations would be of interest to your scheme, please do get in touch.

Burges Salmon are also able to:-

• provide training on the General Code and to help individual schemes with their gap analysis to identify what actions need to be taken to comply with the Code requirements;
   
• prepare any required new policies for your scheme and check that policies and processes are in place for all other existing General Code requirements; 
   
• support in relation to cyber security compliance, we offer a fixed fee cyber security package which has been designed to meet the minimum requirements for schemes to comply with the expectations under the General Code; and
   
• complete the ESG checklist for your scheme on production of certain documents (including your statement of investment principles and implementation statement) and by working with your scheme and your other scheme advisers. 
  
  For those governing bodies wanting to undertake a broader exercise, we can also provide a checklist of ESG requirements in relation to the Statement of Investment Principles and Implementation Statement and under the Climate Change Governance and Reporting Requirements if relevant. 

We are therefore very well placed to help schemes with the various processes that will be involved in ensuring compliance with the General Code. Should you need any assistance in relation to any of the above aspects, we would be delighted to assist - please contact your usual Burges Salmon Pensions team contact, or Pensions partner, Susannah Young.