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 full text of the Pension Schemes Act 2026 is now available. Our short form publication summarises the key measures in the Pension Schemes Act 2026. Watch out for a more detailed publication later this week.
The Pensions Regulator (TPR) has issued its annual funding statement 2026. This is particularly relevant for defined benefit (DB) schemes with valuation dates between 22 September 2025 and 21 September 2026. Most schemes continue to see positive funding levels. Estimates as of 31 December 2025 indicate that around 90% of schemes are in surplus on a technical provisions basis, 80% of schemes are in surplus on a TPR-derived low dependency basis (with 60% of schemes funded at more than 110% on this basis) and 60% of schemes are in surplus on a buyout basis. TPR expects most schemes in this tranche (now called T25/26 to reflect the calendar year) to be shifting their focus from deficit recovery to endgame planning. In its accompanying press release, TPR says that “while the overall picture is positive, trustees should remain alert to wider economic and geopolitical uncertainty. Understanding the risks to investment strategies and employer covenants remains essential, particularly as schemes move closer to their long-term objectives.” TPR will shortly publish a statement outlining issues that trustees should consider around surplus release, in advance of detailed guidance that will sit alongside regulations expected to come into force in 2027.
TPR has published a report on DC consolidation and economies of scale: emerging evidence, looking at the benefits of scale arising from the consolidation of small defined contribution (DC) schemes into master trusts and the links between scale, governance capability and access to private market investment. The report notes that “current UK evidence linking scheme size with gross investment returns is weak” but the new value for money framework will provide additional, comparable data on returns. In conclusion, “there is some evidence emerging of economies of scale benefits, but this is not unequivocal or guaranteed.”
The Pensions Ombudsman (TPO) has issued its corporate plan for 2026/27, backed by a new three-year funding settlement from the Department for Work and Pensions. TPO notes a significant increase in the number of cases closed over the last two years despite a rise in demand for its services. TPO’s plans include improving user online experience, providing more information on common topics, expanding the use of lead cases and engaging early with industry on systemic issues affecting large numbers of scheme members.
TPR has published a consultation on its corporate strategy for the next five years. TPR is seeking answers to the following questions in particular: (1) Does its vision of people having a sustainable income in retirement set the right long-term ambition for the pensions system? Could it be strengthened? (2) Are the trends identified – including consolidation, scale, technology, digitalisation and artificial intelligence – the main forces that will shape the system over the next five years? What’s most important? Is anything missing? (3) Where could TPR’s role be more active, or targeted, to maximise saver outcomes and support a resilient and sustainable market? The closing date is 8 June 2026.
HMRC has published a technical note on inheritance tax. This sets out the timetable for consultations, guidance and regulations before the requirements relating to inheritance tax on unused pension pots come into force on 6 April 2027. The note explains the process for scheme administrators to identify and verify the executors or personal representatives of a deceased member’s estate before a grant of probate or letters of representation have been obtained. The note also explains the point at which a beneficiary becomes jointly and severally liable for inheritance tax in relation to a pension benefit.
Colleagues in our Labour & Employment team have published an interesting blog post on the Employment Rights Act 2025 and what is keeping businesses awake at night.
If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.
