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 a consultation on draft regulations that provide the detail to the release of surplus provisions contained in the Pension Schemes Act 2026. The final legislation will mean that trustees will be able to refund surplus to the employer, even if their scheme rules do not currently allow for this, subject to certain conditions being met. Before exercising the power to release surplus, trustees will need to check their scheme rules to see if they need to use the new power to modify their rules. This power is expected to be in force alongside the draft regulations in April 2027. The draft regulations set out the full process for making a refund of surplus to the employer. Trustees will be able to release surplus to the employer if the scheme has excess funding calculated on the low dependency basis and is not in winding-up. Trustees must first obtain an actuarial assessment from the scheme actuary at an assessment date specified by the trustees. The trustees must next take advice from the actuary and consult with the employer before deciding on a provisional amount of surplus to be released, and a target date for payment. At least three months before making payment, the trustees must provide a written statement to members advising them of the amount and payment date. The actuary must then provide a certificate before payment is made that in the actuary’s opinion the scheme has surplus funding on a low dependency basis as of the date of the certificate, and the scheme is likely to be overfunded on a low dependency basis at any given time in the three years following the date of the certificate. Payment must be made within five working days of the certificate date. Within one week of making a surplus payment, certain information must be provided to The Pensions Regulator (TPR). Under the draft regulations, a section of a segregated scheme will be treated as a single scheme for the purposes of the legislation. Tax legislation will also be amended to permit authorised surplus payments to members, provided the payment is made once the member has reached their normal minimum pension age. Consultation on the draft regulations closes at 11:59 p.m. on 2 September 2026.
TPR has published a statement to support trustees and employers considering surplus release, pending more detailed guidance that will sit alongside the final form regulations. The Financial Reporting Council has said that it will publish technical actuarial guidance to assist actuaries with their obligations in connection with release of surplus, and invites stakeholders to attend a roundtable on 28 July 2026.
TPR has updated its guidance on potential remediation for past alterations to salary-related contracted-out pension schemes (also known as the “Virgin Media remedy”) to reflect the Pension Schemes Act 2026 becoming law. We remind trustees of affected schemes to add this issue to their next meeting agenda to discuss next steps. See our Pension Schemes Act 2026 publication for more information.
The evidence pack supporting the Second Pensions Commission report, Pensions 2050: evidence and future priorities has been updated with underlying data and statistics. The webpage also contains links to a two-part audio version of the full report, which lasts for a mere 14 hours.
Torsten Bell, pensions minister, has published a written statement in connection with a transaction that took place in December 2025, which used the flexible apportionment arrangement (FAA) legislation to effectively transfer the assets and liabilities of a defined benefit (DB) pension scheme to an asset manager, without going through TPR’s approval process for commercial consolidators. The pensions minister said, “whilst this transaction complied with the existing FAA mechanism it did so in a way not anticipated when the mechanism was introduced. We therefore intend to review this area of legislation to ensure the regulatory standards and safeguards evolve, and keep pace with the innovation we are seeing in the pension market.” As a consequence, the government plans to consult on whether and how the existing FAA legislation could be strengthened.
In connection with automatic enrolment, the DWP has published a call for evidence seeking views on whether the alternative benefit quality requirements for DB, hybrid and collective defined contribution (CDC) schemes are operating as intended. The closing time for contributions is 11:59 p.m. on 27 July 2026.
If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.
