The much-discussed Pensions Schemes Bill 2025 has been published to Parliament today. There are no great surprises, with the content largely being trailed for some months. Indeed, two of the core aspects – access to surplus from defined benefit (DB) schemes and new multi-employer defined contribution (DC) scheme “megafunds” – were set out in detail last week and covered in this e-alert.
In addition, the Bill sets a framework for addressing areas of the existing pension system that have room for improvement in both the DB and DC arenas.
The Government has also published “Workplace pensions: a roadmap”, which sets out some of the context for the reforms and how they will be sequenced for implementation, whilst emphasising that precise dates could change. The roadmap confirms that regulations for multi-employer Collective Defined Contribution (CDC) schemes should be published in the Autumn, as well as indicating that work is progressing on decumulation-only CDC.
In light of last year’s Court of Appeal judgment in Virgin Media Limited v NTL Pension Trustees Limited, the Government has also confirmed that it will legislate to allow pension schemes to “retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards” for scheme rule changes that impact the ability for schemes to meet contracting out requirements.
With a significant surplus at its disposal, the PPF does not need to impose a levy. The Bill seeks, therefore, to amend primary legislation that to date the PPF has considered has prevented it from reducing the levy to £NIL. The PPF has stated today that it is still considering the 2025/26 levies and does not plan to proceed with levy invoicing until their decision-making is concluded. The PPF expects to provide an update by the end of July. The Government’s roadmap indicates that substantial levy changes will not take effect until 2027/28.
The Bill also plugs the gap that currently means that PPF and Financial Assistance Scheme benefits will not be shown on Pensions Dashboards.
The Bill introduces a permanent regulatory regime for superfunds, but with most of the detail to be prescribed through regulation. The Government aims for these regulations to come into force by 2028.
The Government expects new flexibilities to be in force by the end of 2027 to safely release “some of” schemes’ low dependency surpluses. The Bill seeks to address barriers in scheme rules and the tests trustees must apply to do this. Regulations on the appropriate funding threshold will be subject to further consultation.
For DC schemes, the Bill introduces several measures that the Government believes will help improve members’ retirement outcomes, such as:
The roadmap sets out separate timelines for the DC and DB reforms, with the expectation being that the Bill receives Royal Assent in 2026.
