Pensions Weekly Update: Part One

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Here is part one of our weekly summary of key legal and regulatory developments relevant to occupational pension schemes.

Several questions have been asked in Parliament recently in connection with the indexation of pre-1997 defined benefit (DB) accrual. In response to the latest questions around the indexation of pre-1997 private DB pensions, Torsten Bell said “The government has no plans to change the way pre-1997 indexation is applied to DB occupational pension schemes. The minimum legal requirements for indexation must be appropriate across all DB schemes. Changing these minimum requirements would increase the liabilities and costs for all schemes. The reforms in our Pension Schemes Bill give trustees more flexibility to share surplus with sponsoring employers, and better negotiate benefits for members, including discretionary increases”. In relation to the indexation of Pension Protection Fund (PPF) compensation for pre-1997 accrual, this is not off the cards: “We are committed to actively consider and reflect on what we have heard regarding the PPF and Financial Assistance Scheme rules on the indexation of pre-1997 pension accruals. We understand that it is an important issue for affected members”.
The Pensions Regulator (TPR) has published its report summarising the results from its March 2025 survey of trust-based occupational DB pension schemes. The research covered a range of different topics, including long-term planning, consolidation, surplus release, pension scams, cyber security, administration and capabilities in relation to climate related risks/opportunities and diversified investments. A few interesting results include the fact that 93% of schemes had a long-term objective with most intending to buy-out liabilities with an insurance company (58%) or run on with low dependency on the employer (31%). TPR notes that comparatively few aimed to run on and generate a surplus (6%), or enter a commercial consolidator vehicle (1%). Around 25% of schemes, however, said that they were attracted to a long-term consolidator, while one in three schemes reported that the payment of a surplus to the employer was permitted under their scheme rules, but none of those surveyed had done this in the previous year.
Regulations have been made that bring into force from 18 November 2025, identity verification of directors and persons with significant control of UK registered companies. This means that directors of pension trustee companies must carry out the identity verification process before the trustee company submits its next annual confirmation statement on or after 18 November.
A pension scheme’s implementation statement (a requirement for occupational schemes with 100 or more members) sets out how the trustees have carried out engagement activity and followed the scheme’s statement of investment principles during the year. The implementation statement forms part of the scheme’s annual report and accounts. This is a reminder that we are fast approaching the deadline for publishing online in a free and publicly available format implementation statements for those pension schemes that have a year end of 31 March 2025, or 5 April 2025. The publication deadlines are 31 October 2025, and 5 November 2025 respectively.
The Society of Pension Professionals has published its detailed response to the third state pension age review, including commentary around fairness, cost and notes that if wider terms of reference, including the purpose of the state pension, had been provided, this would have enabled more relevant factors to be considered and potentially better outcomes.
Watch out for part two of our update, which will have a focus on collective defined contribution (CDC) developments.

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