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DC schemes
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Pension Schemes Bill 2025
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The FCA’s consultation on a new Value for Money framework for personal pension schemes closed on October 17, 2024.
The anticipated Pension Scheme Bill 2025 is expected to include provisions for a new value for money framework for occupational pension schemes.
Additional changes anticipated in the Bill include consolidation of small DC pots and new requirements relating to decumulation options for members.
The current consultation on DC “megafund” consolidation (following the Mansion House proposals) closes on January 16, 2025.
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| Legislative framework for superfunds |
2025/26
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The Government sees superfunds as a route to greater pensions investment in UK illiquid assets.
The DWP says it will establish a public DB consolidator by 2026. Consultation on features for a possible scheme closed on April 19, 2024.
The Regulator updated its interim superfund guidance in July 2024.
Draft legislation is expected in the upcoming Pension Schemes Bill.
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Relaxation on DB surplus refunds
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2025? |
Consultation on Options for DB schemes closed on April 19, 2024. No indication that DB surplus provisions included in the forthcoming Pension Schemes Bill.
The tax charge on repaying DB scheme surplus to employers has been reduced from 35 per cent to 25 per cent.
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| Pension Protection Fund (PPF) levy consultation |
2025/26
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To reflect the strong financial position of the PPF, the proposal is to maintain the levy estimate at £100m. Publication of final PPF Levy Determination 2025/26 postponed to January 2025 in anticipation of possible changes to legislation to permit a zero levy.
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| Pensions and inheritance tax |
April 6, 2027
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Unused DC funds and death benefits to be brought within scope of inheritance tax (IHT). Current consultation closes January 22, 2025.
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Pensions Dashboards
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From April 2025 to October 2026
DWP guidance refers to staged on-boarding of schemes, starting with the largest schemes.
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Staging deadlines are set out in guidance. All schemes with 100 or more relevant members at the scheme year end between April 1, 2023, and March 31, 2024, must be connected by October 31, 2026.
The Regulator expects trustees to take heed of the guidance, identify staging date and develop action plan for getting data ready for dashboard. Discuss with administrators and service providers.
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| DB scheme funding: changes to requirements |
Regime applies to scheme valuations on and from September 22, 2024. |
Consider scheme’s long-term objective and journey plan and discuss with employers. Regulator’s revised DB funding code in force from November 12, 2024.
Funding and investment strategy to be in place 15 months following the first valuation after September 22, 2024.
The Regulator’s new DB Funding Code came into force on November 12, 2024.
The Regulator’s new covenant guidance has now been published.
Templates for the statement of strategy are now available.
The Fast Track submission tests and conditions were published on November 20, 2024.
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GMP conversion
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Pension Schemes (Conversion of GMPs) Act 2022: Royal Assent granted April 28, 2022.
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Not yet in force. No indication of commencement date.
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Reforms to auto-enrolment – lower minimum age to 18 and remove lower earnings limit.
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2025/26?
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The Pensions (Extension of Automatic Enrolment) (No.2) Act 2023 received Royal Assent on September 18, 2023. The relevant provisions are not yet in force. Commencement not a Government priority.
Part 2 of the Government’s Pensions Investment Review (expected to include the scope of auto-enrolment) has been postponed “indefinitely”.
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Over-the-counter derivative contracts under EMIR – long-term approach.
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Before June 18, 2025
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HMT has responded to the earlier call for evidence. The decision is that the exemption for pension funds from the EMIR clearing obligations will be maintained in the longer term. Secondary legislation will be forthcoming to ensure the exemption does not expire on June 18, 2025.
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First Government top-up amounts to be paid to low earners in schemes using net pay arrangements
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Calculated on contributions made in tax year 2024/25, but top-ups to be paid in tax year 2026/27.
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In force. Legislation included in Finance (No 2) Act 2023, amending section 193A Finance Act 2004.
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Rise in normal minimum pension age from 55 to 57
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April 6, 2028
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Legislation (Finance Act 2022) in force from February 24, 2022.
Schemes should check to which members the new protected pension age (of 55) will continue to apply.
Formulate member communications strategy.
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Notifiable events: changes to current regime for DB schemes
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Final regulations still awaited. Significant uncertainty remains about the progress of changes to the regime.
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There is no indication when regulations might be published for consultation but once (and if) the final regulations appear, the Regulator will update its Notifiable Events Code.
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Second review of State Pension Age (SPA) due in first two years of this parliament.
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2025? |
SPA is currently 66, with two further increases set out in legislation: a gradual rise to 67 for those born on or after April 1960 and a gradual rise to 68 between 2044 and 2046 for those born after April 1977.
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State pension top-ups
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April 5, 2025 |
Further extension to deadline to April 5, 2025, for individuals to complete their post-April 2006 NIC record.
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RPI reform and switch to CPIH
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2030 |
The judicial review of this decision was dismissed so Trustees should take advice on implications for DB schemes and consider what preparatory steps may be required. No appeal has been sought, so the judgment is final and no further challenge is possible.
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