Pension Schemes Bill
The Pension Schemes Bill was finally published in June 2025, covering a wide range of measures. It is expected to receive Royal Assent in 2026, with consultations on draft regulations to introduce many of the measures then expected to follow. The aim is for all changes to be in force by the end of 2030, but timings are “very much indicative”.
What does the Bill cover?
Key DB measures
- Subject to “stringent funding safeguards” (including the need for actuarial certification), DB trustees will have power to pass a resolution amending their scheme rules allowing greater flexibility over the use of any surplus. Details will be set out in regulations.
- Currently subject to a TPR interim authorisation regime, the Bill will provide a legislative framework for commercial DB superfunds. Key principles include: superfunds will be authorised and supervised by TPR, they will need to have effective governance in place, there are triggers governing when profit can be taken, and certain financial thresholds will need to be met.
Key DC measures
- The Bill sets out requirements for a new VFM framework for trust-based schemes, mirroring the FCA’s proposals for contract-based arrangements announced last summer. The VFM framework is intended to shift focus from cost towards value for all key players involved in DC schemes.
- The Bill lays the groundwork for a new multiple default consolidator system, under which members with certain deferred small pots worth £1,000 or less would be automatically consolidated into a small number of authorised consolidator schemes.
- Subject to a transition pathway for smaller schemes to get up to scale, as well as providing for certain exclusions in regulations, DC providers and master trusts will have to have £25bn in assets under management in at least one large “Megafund” default arrangement by 2030.
- In future, DC trustees will have to provide default retirement solutions for their members (from which they can choose to opt out). Where it is “not practicable” for trustees to design and make available a default retirement solution, they will need to partner with another scheme that is able to deliver this. Comparable rules will be required from the FCA for the managers of contract-based schemes.
Want to keep on top of developments?
For more information about the Bill as it travels through Parliament, see our related insights or contact one of our lawyers below.
