02 July 2026
10 mins
Welcome to the latest edition of Current issues. This month, we cover a wide range of developments shaping the pensions landscape. From the DWP's legislation on DB surplus payments to the Government's first Commencement Regulations following the Pension Schemes Act 2026. Below, we’ve highlighted key issues from this month’s publication. Click here to view the full edition.
The Department for Work and Pensions has published eagerly awaited draft legislation on the conditions for payment of defined-benefit (DB) surplus to employers. It, and a statement from the Pensions Regulator, paint a picture of how the process is expected to work in practice.
At the beginning of June 2026, His Majesty's Revenue and Customs (HMRC) revised one of its internal manuals, VAT Input Tax (VIT), making changes to its policy on the value-added-tax treatment of funded occupational pension schemes. The changes affect, principally, private-sector defined-benefit schemes, and may necessitate changes to the arrangements made for the reclamation of VAT incurred in the course of their operations.
The DWP is consulting on proposed changes to the Conditions for Transfers Regulations. The Government's press release concentrates on reforms to prevent use of small self-administered schemes (SSASs) as sham transfer destinations. However, the changes would, if made, reach further, tackling some of the most contentious ‘quirks’ of the legislation, which have now been affecting transfers for almost five years.
The DWP has called for evidence on the alternative quality requirements for auto-enrolment compliance, as a prelude to a periodic statutory review.
Amendment Regulations from the Department for Work and Pensions (DWP) will reduce the statutory hurdles for transfer without consent (TWOC) of money-purchase rights into collective defined contribution (CDC) schemes. The approach that will apply for TWOC into CDC schemes will be similar to that which already applies for transfers into DC master trusts, such that there will be no statutory requirement for trustees to obtain written advice from a suitably qualified and independent adviser.
The Government has begun to bring parts of the Pension Schemes Act 2026 into force. The first Commencement Regulations activate amendments to the levy rules for the Pension Protection Fund (PPF), giving it freedom to set them at the desired levels (including zero). The changes came into force on 29 June 2026.
The Government has made amendments to the legislation that empowers and requires His Majesty’s Revenue and Customs (HMRC) to resolve the 'net pay anomaly' affecting tax relief for member pensions contributions.
The Government announced its intention to review the legislation on ‘flexible apportionment arrangements’ (FAAs) in connection with multi-employer defined-benefit (DB) pension schemes. It wants to explore whether additional safeguards are desirable when FAAs are used for purposes not anticipated when the legislation was introduced, back in 2012. The statement follows the use of an FAA as part of last year’s ground-breaking risk-transfer agreement involving the Stagecoach and Aberdeen corporate groups.
His Majesty’s Revenue and Customs is holding a technical consultation exercise on draft amendments to the calculation of annual-allowance pension input amounts following guaranteed minimum pension (GMP) conversion. In essence, the draft changes would mean that pension increases resulting from GMP conversion would no longer trigger loss of the ‘deferred-member carve-out’.
The Treasury laid before Parliament Regulations making further changes to the tax rules connected with the abolition of the lifetime allowance. The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 came into force on 25 June 2026. They cover matters such as the treatment of transfers to, and lump sums from, overseas pension schemes; and changes to the calculation of protected pension commencement lump sums and the lump sum and death benefit allowances.’
Highlights from His Majesty's Revenue and Customs' (HMRC) Pension Schemes Newsletter 182.
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This communication has been compiled by Hymans Robertson LLP® (HR) as a general information summary and is based on its understanding of events as at the date of publication, which may be subject to change. It is not to be relied upon for investment or financial decisions and is not a substitute for professional advice
(including for legal, investment or tax advice) on specific circumstances. HR accepts no liability for errors or omissions or reliance on any statement or opinion. Where we have relied upon data provided by third parties, reasonable care has been taken to assess its accuracy however we provide no guarantee and accept no liability in respect of any errors made by any third party.
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