Pensions Weekly Update – 18 June 2025

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Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

The Pensions Ombudsman (TPO) has produced an update blog post by Chief Operating Officer, Robert Loughlin, on TPO’s operating model review. The blog post notes that a record number of complaints have been resolved during the first year of implementation of the new operating model, but that there has also been an increase in the number of complaints. The blog post also states that TPO will continue to raise awareness of the changes that have been made around requiring scheme level dispute resolution to be completed before TPO accepts complaints, and that TPO will provide information and tools to both schemes and individual applicants to support earlier dispute resolution. TPO will also be exploring the expansion of expedited and short form determinations. The blog post flags that TPO will expect schemes to complete a good quality and well signposted end-to-end complaint process. It is worth noting that a formal response to TPO by parties to a dispute might soon be required earlier in the process, with deadlines tightened up.
Taking a couple of items in the Pension Schemes Bill, here is some background to each topic.

First, the Pension Protection Fund (PPF) levy. The PPF has been a huge success. So good, in fact, that the PPF is managing a surplus with assets totalling £32 billion as of 31 March 2024, and liabilities of £19 billion. Current legislation, which was passed at a time of high deficits, provides that the levy cannot be increased by more than 25% year on year. While this afforded protection for levy payers at the beginning, it now has the opposite effect and results in the PPF having to set a sizeable levy even where funding is not required. As things currently stand, if the PPF were to set the levy at zero but needed to raise the levy in a future year, the 25% increase rule would prevent this. Draft legislation has been included in the Pension Schemes Bill to address this anomaly. The PPF has said that it is considering the draft legislation and whether to reduce the levy estimate (currently set at £45 million) to zero for the 2025-2026 levy year.

Second, TPO. It is common practice for pension trustees to recoup overpaid pensions by setting off any overpayment against future pension payments. Where trustees successfully argue their case before TPO, section 91(6) of the Pensions Act 1995 will bite. This provides that where there is a dispute as to an amount owed, “the charge, lien or set-off must not be exercised unless the obligation in question has become enforceable under an order of a competent court”. The court of appeal recently ruled that TPO is not a “competent court” for the purposes of section 91(6) Pensions Act 1995. While TPO’s determination relating to recoupment of overpaid pension will be binding, the ruling means that the trustees need to obtain a county court judgment for enforcement before they can implement that TPO determination. The Pension Schemes Bill makes an amendment to section 91 of the Pensions Act 1995 to negate the need for a county court order where the trustees have already obtained a TPO determination in their favour.
Join our Labour & Employment colleagues for a webinar on 3 July, during which they will take a look at the government’s white paper on “Restoring Control Over the Immigration System”. They will assess the impact of the white paper on employers and explore some strategic approaches.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.