The Government response to the DWP's March 2009 consultation review of disclosure has finally appeared this week. The new publication includes a consultation on draft regulations, which is to last eight weeks and closes on 1 March 2010.

Last year's consultation was intended to test the general concept of a more principles-based approach to pensions legislation. To those who rail against the voluminous and arguably overly-prescriptive body of UK pensions legislation, this would have sounded attractive. Thus for the pensions world, DWP's review of disclosure of information requirements applying to occupational, personal & stakeholder pension schemes was a significant event.

If the proposed approach was to be adopted, the DWP envisaged that a single, high level principle could be incorporated in the legislation along the following lines:

"Members should be given sufficient information that allows them to understand the benefits to which they will be entitled and any other relevant information that will enable each member to make decisions in his or her best interests."

However, it was acknowledged that some detailed provisions would still have to be set out in regulations. Members would have to continue to receive adequate information, and the IORP provisions satisfied. An important requirement, too, was that schemes which complied with the current regulations would not have to alter their procedures.

Other proposals included the consolidation of disclosure regulations into one statutory instrument, replacement of specified timescales with references to "within a reasonable period", backed by a Code of Practice, and amendment of the legislation to facilitate schemes' use of electronic methods of communication.

Six questions were posed, to which responses were received from sixty-five individuals and organisations. The questions are set out below, with a brief summary of the Government's revised proposals in the light of the responses.

Q1 Against the background that a streamlined set of prescriptive provisions would still be required for the purposes of satisfying IORP and in the interests of certainty for schemes, do you support the addition to the legislation of a key, overarching disclosure principle?

This was perhaps the critical question. Some respondents worried that it might leave schemes open to legal challenge from members claiming the scheme had not met the requirements implied by an overarching principle, even when all of the prescriptive requirements had clearly been met. The current, prescriptive approach gives comfort. In the absence of strong support, the Government has decided not to proceed. This is a severe setback for proponents of principles-based legislation. While not actually pronounced dead, it is firmly on the back-burner for now.

Q2 Do you support the consolidation of general disclosure provisions into one set of regulations, rather than the existing position where disclosure requirements affecting occupational, personal and stakeholder pension schemes are dealt with separately?

Although many respondents were in favour, the Government gleaned sufficient encouragement to drop this idea too. Some kind of partial consolidation might be explored in future.

Q3 Do you consider that the proposed approach outlined in Annex C [which set out a framework for streamlined regulations] is appropriate? Detailed comments on particular requirements would of course be welcome.

One step forward emerged from this: from 1 October 2010 it is proposed that schemes will be permitted to send out shorter, more user-friendly SMPI statements. In addition to removing certain requirements, the new draft regulations allow 'signposting' to some information (enabled by new proposed instructions on electronic communications). The DWP is to liaise with the BAS on changes to TM1.

Although some respondents asked that DB schemes also be required to automatically provide annual benefit statements, the Government isn't going to impose this.

Q4 Do you support the proposal for regulations to require relevant information to be provided "within a reasonable period" backed with a Code of Practice, replacing the existing approach where timescales are specified in regulations?

There was no consensus, so this one too is dead.

Q5 Do you have any views on the disclosure of information by schemes in the context of the automatic enrolment requirement for employers, commencing from 2012? (Paragraph 4 of Annex C proposed a requirement for schemes to provide basic scheme information within 14 days when a new employee commences pensionable service.)

Here the DWP has seized an opportunity to actually reduce a prescribed time limit. On the one hand, it has decided elsewhere to extend the auto-enrolment "joining window" from the originally proposed 14 days to 1 month. In line with this change, though, the Government has decided that the time limit for the provision by occupational pension schemes of basic information to new members should be reduced from 2 months to 1 month. Based on the responses received to the March consultation, it thinks this reduction should cause no difficulty for schemes.

Q6 Do you have views on the proposal to allow greater use of electronic communications and on how schemes could make significant cost savings from this change?

Based on the majority view among respondents, the Government proposes to allow schemes to use electronic communications as their default method of communication if they wish. In order to promote efficient administration and minimise burdens, it should be for members to opt out if they do not wish to receive information in this way (rather than opting in, which some respondents preferred). Some safeguards are proposed, however, to ensure that members are alerted to changes in communication methods and that the needs of groups such as the visually impaired are taken into account.