Policy summary: a blockbuster Pension Schemes Bill

The Government has introduced the much-anticipated Pension Schemes Bill to Parliament, putting the wheels in motion on large-scale pension reforms affecting defined contribution (DC) and defined benefit (DB) pension schemes, including the Local Government Pension Scheme (LGPS). It’s likely to receive Royal Assent in 2026, with secondary legislation required to bring provisions into force and add the all-important detail

Following previous announcements, the Bill confirms that the government is moving forward with several plans. Specifically, it will legislate to:

• Defined Contribution Pensions: New requirements for multi-employer DC schemes, annual Value for Money assessments, small pot consolidation, default pension benefit solutions, and contractual overrides for underperforming arrangements.
• Defined Benefit Pensions: Modifications to surplus extraction rules for well-funded DB schemes, with details to be specified in regulations.
• LGPS: Reforms to investment management and governance, including asset consolidation.
• Superfunds: Establishment of a legislative framework for DB superfunds, detailing approval processes, governance standards, and regulatory oversight.
• Other Measures: Data display on dashboards, PPF levy adjustments, and re-establishment of the Pensions Ombudsman as a competent court.
• Next Steps: The Bill will undergo parliamentary scrutiny, with consultations and discussion papers to follow. The DWP has published a roadmap for implementing reforms, with key dates extending to 2030.

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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.