7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.

In this 7 Days

TPR publishes Annual Funding Statement

On 29 April 2025, TPR published its latest annual funding statement and accompanying analysis. The statement is primarily aimed at schemes with valuation dates between 22 September 2024 and 21 September 2025. However, it also includes key information about the new DB funding code of practice and the updated covenant guidance which will be relevant for all DB schemes. Key takeaways include:

  • most DB schemes continue to see positive funding levels, with TPR estimating that, as of 31 December 2024, around 54% of schemes were in surplus on a buy-out basis, rising to 76% on TPR’s derived low dependency basis and 85% on a Technical Provisions basis
  • with continued positive funding levels, TPR expects most schemes to shift their focus from deficit recovery to endgame planning, and
  • despite healthy funding positions, trustees should keep in mind the potential for heightened trade and geopolitical uncertainty, as they need to understand any potential risks to the scheme’s investment strategy and employer covenant.

For more details, please see our Alert.

Government responds to WPC report on DB schemes

On 30 April 2025, the Government’s response to the WPC’s report on DB pension schemes was published. This addressed the various recommendations from the WPC including:

  • pre-97 pension increases – TPR’s research found that around two-thirds of schemes allow for discretionary benefits to be paid (usually requiring trustee and employer consent). However, in most cases, these schemes had not provided any such benefits over the previous three years.  The Government plans to work with TPR to understand why schemes are not making discretionary increases on pre-97 benefits and monitor trends
  • governance of trust-based schemes – the Government is aiming to consult on the governance of trust-based schemes later in 2025. The consultation will focus on issues such as sole trusteeship, accreditation and support for lay trustees. TPR is also developing a trustee register to centralise trustee information
  • DB scheme consolidation – the Government will continue to explore whether a small, focused Government consolidator run by the PPF could be an option for schemes that are “less attractive” to commercial providers.

TPR publishes market oversight report

TPR has published a report on current market volatility and what action trustees should be taking. This is in response to recent trade and geopolitical tensions brought about by US trade tariffs that continue to cause volatility in the market. TPR expects trustees to:

  • consider and review their arrangements and ensure they are fit for purpose
  • have “robust” governance and operational resilience to adapt to changing market conditions, and
  • have “clear communication lines” with employers, advisers and other delegated authorities so they can take action when needed.

TPR will continue to monitor how the current market environment affects schemes, and will update its engagement and guidance where appropriate.

Bank of England sets out priorities for bulk purchase annuity market

On 30 April 2025, the Bank of England’s Executive Director of Insurance Supervision, Gareth Truran, gave a speech setting out three priorities for the bulk purchase annuity sector supporting investment, maintaining resilience, and improving transparency. Its new approach to stress testing should be more transparent – publishing both sector-wide and firm-specific stress test results for the largest UK life insurers. In designing the new tests, the Bank of England sought input from pension scheme trustees, as well as others, on the information they would find helpful to understand insurer resilience. The aim is to publish the first results by the end of 2025.

DWP to legislate for CDC schemes

Following its consultation last year, the DWP has announced plans to legislate for unconnected multi-employer CDC schemes in autumn 2025. It intends, subject to Parliamentary approval, to bring the legislation and an updated TPR CDC module into force “as soon as practicable”. The Government will “continue to work” with industry stakeholders to develop “decumulation only CDC schemes”.