The Pensions Regulator's General Code is here: are you ready?

The Pensions Regulator (TPR) has announced that its long-awaited general code of practice was laid in Parliament on 10 January 2024 and is expected to come into force on 27 March 2024.

TPR also published the final response to its 2021 consultation on the new code, together with a copy of the code as laid in Parliament.

What is the general code?

The new code brings together and updates ten of TPR's existing codes of practice. More importantly, it sets out what trustees need to do in order to comply with the new legal requirement to establish and operate an effective system of governance (ESOG), including internal controls, proportionate to the size, nature, scale and complexity of the activities of their scheme.

Have any changes been made?

The consultation response reports that TPR received over 100 formal responses on the draft code, and confirms that the final version of the code includes a number of changes. For example, there are:

• changes to take account of feedback received in the consultation, including to clarify expectations and to improve the structure and naming of modules;
• additions to take account of changes in the law since the draft code was published;
• changes to the Own Risk Assessment (ORA) module, including to allow "schemes to complete an ORA on their own timetable, and in part or in whole, provided it is carried out in its entirety at least every three years [and to] relax the point at which the first ORA needs to be published";
• changes to include more detail on the new requirement to have a risk management function;
• additions to encourage action on diversity and inclusion;
• changes (stronger wording) around professional trustee accreditation; and
• changes to the text and expectations around the new requirement to have a remuneration policy.

The consultation response also confirms that the final, web-based version of the code will include links to existing TPR guidance and to other relevant guidance, as well as details of relevant organisations and resources.

What do trustees need to do and when?

All trustees will need to comply with the new ESOG requirement.

Some trustees will already have completed or started to complete a gap analysis to understand where they already meet the expectations of the code and where they need to take action. They will need to update their analysis to take account of the changes that have been made.

Trustees who have not started work in this area will need to complete a gap analysis as a matter of priority.

Osborne Clarke comment

It seems unlikely that TPR will expect schemes to be fully compliant on 27 March. However, it will expect all trustees to be taking action to understand where they are not compliant and to be putting a plan in place to address this.

How we can help

We have built a simple to use, online solution to help trustees to complete an ESOG gap analysis and otherwise prepare for this new requirement. Your usual Osborne Clarke contact can provide you with more information.

We are also preparing a webinar in which we will talk about the ESOG requirement and the changes made to the final version of the code. If you are on our mailing list, please look out for an invitation to this.