It’s fair to say that yesterday’s announcement of a General Election on 4 July 2024 took the country by surprise, and the pensions world was no exception.  At a time of significant change for the pensions industry, many of us will be waking up today wondering where this leaves initiatives such as the Mansion House reforms?  Is there any hope we’ll see the promised joint consultation from the Pensions Regulator and the FCA on the value for money framework before the summer? What will happen to the DB funding code we’re all waiting for?

And looking further ahead, if there is a change of government, what might that mean for recent changes such as the abolition of the lifetime allowance and the forthcoming increases in normal minimum pension age / state pension age?

The calling of the election of course means that Parliament will be dissolved.  Rishi Sunak told the country yesterday that the King had granted his request, and that the formal dissolution of Parliament will happen on Thursday 30 May, with the current Parliamentary session prorogued from Friday 24 May. 

From the legal perspective, once Parliament is dissolved no legislation can be laid.  This means we’ll have to wait at least until after the summer for any new laws, such as the superfunds legislation and the regulations bringing into force the changes made by the Pensions (Extension of Automatic Enrolment) Act 2023. Importantly, the DB funding Code also needs to be laid before Parliament for 40 days before it comes into force.  The expectation had been that it would be in force by September 2024, but this will now not be possible.  With the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024 already in force and applying to schemes with valuation dates from 22 September 2024, and publications of both the Code and further guidance likely to be delayed for at least some months, schemes will be anxious to hear from the Pensions Regulator about their expectations during this period of uncertainty. 

When Parliament is dissolved, a pre-election period known as “purdah” begins. During purdah the activities of the Government, its departments and its officers are limited so that no party is unfairly advantaged during the electoral campaign.  This means that we can expect many other activities by Government departments like the DWP to be put on hold. Although not expressly prohibited in principle, in practice it is unlikely we’ll see publication of consultation responses, such as the response to the recently concluded Options for DB schemes consultation, during the pre-election period – especially where the response is politically sensitive.

In the run-up to the election, we’ll be keeping a close eye on party manifestos and policy proposals for pensions. Particular points of interest will include:

It’s worth mentioning that for pension scheme trustees, whilst the calling of the election means significant uncertainty around some key changes – particularly the new funding code for DB schemes – there are a number of important areas where work can and should continue.  These include updating scheme policies and procedures to implement the requirements of the Pensions Regulator’s General Code and preparations for connecting to the pensions dashboards framework. 

Look out for more from us in the coming weeks as we learn more about how some of these key issues for the pensions industry may develop under the next Parliament.