The dawning of a New Year provides us with the chance to reflect on what we’ve experienced in the year just gone and what challenges and exciting opportunities lie ahead.

After a difficult start to 2021 as the UK endured its third lockdown, the vaccine rollout allowed a return to some sort of normality during the year, although the pandemic is far from over.

COP26 put climate change firmly at the top of the policy agenda and new regulations from the Department for Work and Pensions (DWP) positioned UK pension schemes as leaders in governance and reporting of climate risk. Combined with the new Pension Schemes Act 2021, the compliance burden has undeniably increased; it should lead over time to safer, more sustainable futures for pension members.

Looking ahead 2022 is likely to have a difficult start with economic growth appearing to be slowing following further restrictions due to the pandemic and geopolitical tensions. Furthermore, the tightening of monetary policy in response to rising inflation could compound the withdrawal of fiscal policy support in the UK, and lead to rising stress in UK companies. Trustees and sponsors will need to be proactive around protecting their members and their businesses.

Importantly, the Pensions Regulator (TPR) will consult on its new funding code of practice. Their challenge will be to of strike the right balance between ensuring schemes are adequately managing their risks and allowing UK companies to recover and compete in this challenging environment.

Our Outlook for DB Pensions in 2022 includes articles that explore the key themes that we expect to emerge during the year. We hope you find them interesting.