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The Department for Work and Pensions (DWP) has published its consultation on draft guidance relating to pension fund trustees’ investment and fiduciary duties. The draft guidance looks at a variety of issues, including financially material considerations and non-financial considerations when making investment decisions. The draft guidance also touches on taking account of members’ views and what is meant by “best interests of members”. Some practical examples are set out at the end of the draft guidance. Consultation closes at 11:59 p.m. on 27 January 2027.
The DWP has published its response to consultation concerning proposed amendments to the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021. The 2021 regulations were designed to protect members from pension scams by imposing conditions that must be met before a pension scheme can action a request from a member wishing to exercise a statutory right to transfer pension benefits to another pension scheme. The government has confirmed that it plans to make the following amendments.
If the trustees consider that the receiving scheme is a “reputable” pension scheme, they will be able to process the statutory transfer with fewer checks.
Restrictions that apply where the receiving scheme contains overseas investments will be removed.
An exemption from the requirement to take Money and Pensions Service (MaPS) guidance will apply where the member has already received this guidance in the last 12 months (unless the proposed transfer is to a small self-administered scheme (SSAS)).
The introduction of a restriction preventing transfers to a receiving scheme where the member does not have an “employment link” with that scheme. It appears that this will be targeted at transfers to SSAS arrangements and even if the required employment link can be established, the member will still need to obtain MaPS guidance before a statutory transfer to a SSAS can proceed.
It is planned that the changes will come into force in April 2027.
The government has published a draft Finance Bill. Clauses 24 to 29 contain draft legislation to implement certain pensions measures announced at Budget 2026. These relate to the introduction of a new pensions tax allowance for individuals who have reached state pension age, removal of the two-year deadline for paying death benefits, collecting tax due on excess lump sum death benefits and relaxation of HM Revenue and Customs’ (HMRC’s) serious ill health lump sum rules. We summarised these measures in our weekly update on 4 November 2026. The bill also includes draft legislation setting out the tax treatment in relation to the release of surplus to pension scheme members. This mainly reflects the draft legislation previously consulted on, with a few clarificatory tweaks. For example, the legislation contains several conditions that must be met in order for a payment of surplus to members to be authorised. One of the conditions is that the payment would have been an authorised employer surplus payment if the right to receive the payment had been granted to the sponsoring employer of the pension scheme. The bill provides additional clarification around this condition. The bill also deals with the scenario where assets are first transferred to another registered pension scheme before being paid out.
The government has undertaken its annual review of the automatic enrolment (AE) trigger and qualifying earnings bands. The trigger and thresholds will remain unaltered for 2027/2028 at £10,000 (for the AE trigger), with the qualifying earnings band being specified earnings between £6,240 and £50,270.
Also, in connection with AE, the secretary of state is required every three years to review the regulations made under powers in the Pensions Act 2008 that introduced the alternative quality requirements for pension schemes being used for automatic enrolment into workplace pensions. The government has now published the outcome of its review. For the first time, the review included the quality requirement for collective defined contribution schemes. The government concluded that there should be no change to the existing requirements.
The Pensions Regulator (TPR) has published a press release along with a link to findings from its trustee governance survey. The findings are not surprising with larger schemes generally having better governance systems in place. TPR says the findings present new expectations for trustees to benchmark their governance against TPR’s general code, strengthen succession planning and board development, as well as ensure governance and risk management arrangements are supporting good outcomes for members. TPR flags the need for trustees to make sure they have the necessary governance, skills and capability to make increasingly complex decisions in the interests of members including making active decisions about the future strategic direction of their scheme. This includes consolidation in the interests of members.
The Financial Conduct Authority (FCA) has published its final rules and guidance in relation to ESG ratings providers. ESG ratings providers will fall within the remit of the FCA from 29 June 2028. The rules set out the framework for seeking FCA authorisation.
The government has published a House of Commons briefing paper, which is a useful resource on the background to LGPS investments.
In the latest instalment of our thought-leadership campaign “Cost of Living: the Pension Dimension”, partners Chris Harper and Simon James share their views on auto-enrolment and beyond. How should we build on the current system to improve pensions adequacy?
Pensions networking receptions are taking place in our four UK offices this week and next, as part of our thought-leadership campaign launch. Please come and join us. If you have not yet signed up for an event you can register here.
If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.
