Events and briefings

The government has recently confirmed it plans to implement a revised approach to the reporting and payment of Inheritance tax (IHT), which is due to apply to unused pensions and death benefits from 6 April 2027. It has also confirmed death in service benefits paid from registered pension schemes will be out of scope.

These are welcome changes. However, although under the revised approach a deceased member’s personal representatives and pension beneficiaries will be joint and severally liable for any IHT that is payable, the process remains complex and still gives rise to some potential risks for pension schemes and providers.

For details on the latest proposals and what they mean for you read our speedbrief, as we:

• Summarise the proposed revised approach to the reporting and payment of IHT on unused pensions and death benefits
• Consider what this will mean for pension schemes and providers, and
• Identify some of the potential risks associated with the revised approach

In our latest edition of Pensions in a pod (UK), Emma King is joined by Simon Daniel and Jen Green to discuss what the reforms contained in the Pension Schemes Bill are likely to mean for hybrid schemes. In particular, they consider:

• The scope for hybrid schemes to make use of the greater flexibility in the statutory rules relating to the use of surplus, including the prospect of using a surplus in the DB section to fund contributions to the DC section
• How the reforms in the Bill may impact the end game options and journey plan for the DB section within a hybrid scheme
• What the new requirements for trustees to provide one or more retirement income solutions for DC members will mean for hybrid schemes, and
• How the new value for money framework and the proposed small pots solution will operate

In another major pensions announcement, the government has launched a new wide-ranging Pensions Commission.

The Commission will examine:

• How to improve retirement outcomes, especially for those on the lowest incomes and those at greatest risk of undersaving
• The long-term challenges of supporting an ageing population
• How to ensure Britain in the mid-21st Century delivers financial security in retirement through a pensions framework that is strong, fair and sustainable

Alongside the announcement of the new Pension Commission, the government also commissioned two reports as part of its latest State Pension Age Review.

The Pensions Commission will build on the government’s Pension Investment Review and the measures contained in the Pension Schemes Bill. It is hoped it will help to build a consensus around the steps needed to establish a pensions system that, in the words of the Minister for Pensions “is truly adequate, in the broadest sense of that word”.

You can find out more about the scope and timings of the Commission’s work in our latest speedbrief.

With the final regulations for commercial “whole life” Collective DC (CDC) schemes round the corner, we’re seeing an increase of activity in the CDC space. In this CDC Insights article, we explore five key points for providers, employers and other stakeholders to consider when setting up a commercial CDC scheme.

Read our new CDC Insights where we discuss the questions:

• Who will be the “Scheme Proprietor”?
• How to fund the new CDC scheme and Scheme Proprietor?
• How will the CDC scheme be set up: via a new or existing scheme?
• Can DB surplus be used as “seed capital” for a CDC scheme?
• When will new segregated sections need to be created in the CDC scheme?

Please get in touch with our CDC experts Michael Jones, Sarah Swift and Freya Stuart if you would like to discuss further.

The government has finally unveiled the Pension Schemes Bill which will deliver its vision for workplace pensions in the UK. It will introduce a number of major reforms.

We hosted a webinar which ran through the key measures contained in the Bill to help you understand what they mean for your scheme or business.

During the webinar our partners Charlotte Cartwright, Sarah Swift and Michael Jones discussed:

• reforms that are relevant to defined benefit schemes, including the proposed relaxations to the rules on return of surplus
• reforms that will shape the DC workplace pensions landscape, including the scale requirements for master trusts and GPPs’
• new guided retirement requirements and small pots solution that will apply to all DC auto-enrolment schemes
• the government’s ‘reserve power’ to set a minimum level of scheme assets that must be invested in UK productive assets

The government has set out its vision for bigger, better and less fragmented DC workplace pensions. It has also announced plans to create new options for DB schemes and sponsors, including giving them greater flexibility over returning surpluses to employers and members and paving the way for more commercial DB superfunds. The introduction of the Pension Schemes Bill will enable the government to implement its vision for workplace pensions and fulfil the commitments it has made.

Additionally, in a surprise announcement, the government has also confirmed it plans to introduce a legislative solution to the problems arising from the Virgin Media judgments on the need for actuarial confirmation where amendments were historically made to contracted-out salary related schemes. We are expecting the details of this to be set out in separate regulations.

DC Practical Notes is our quarterly thought-leadership report, giving trustees, employers and providers of defined contribution (DC) pension schemes insight into what we are encountering in practice and our market-leading commentary on several key legal issues.

In a bumper summer edition, we explore the government’s Final Report on the Pensions Investment Review, Mansion House Accord, reserve power for mandation, and other key developments.

After much anticipation, the government has provided further details of how it plans to amend the statutory rules on the return of surplus assets to employers from ongoing DB schemes. Significantly, it is planning to reduce the funding level an ongoing scheme must meet before surplus can be repaid from buy-out to low dependency. Although any repayment will still require trustee agreement and actuarial sign-off.

The government says the changes will remove barriers to the repayment of surplus, while maintaining safeguards to protect members’ benefits. It is also considering changes which might allow one-off payments out of surplus to be made to members.

In the long awaited response to the consultation on Options for DB schemes, launched by the previous government in February 2024, the government also confirmed it does not intend to take forward proposals to introduce 100% PPF protection for members in return for schemes paying a higher levy. However, it is still considering the merits of establishing a so-called “government consolidator” for DB schemes.

Yesterday (13 May 2025), seventeen of the largest workplace pension providers in the UK signed the “Mansion House Accord”, which is a successor initiative to the Mansion House Compact.

The Accord is a voluntary expression of intent by signatories to achieve a minimum 10% allocation to private markets across their main default funds by 2030, with at least 5% allocation to UK private markets.

The term “private markets" is broad and means unlisted equities, property, infrastructure and debit/credit. Whereas the Mansion House Compact focussed on unlisted equities only, the Accord broadens the scope of asset classes to real, physical assets.

Solving the ‘small pots’ problem has been high on the government agenda for some time. In today's workforce, individuals change jobs more frequently than in the past. As a result, individuals often lose touch with pension schemes they were briefly part of, leaving these schemes with deferred small pots that are disproportionately costly to administer.

In a welcome development, the DWP has published a report which outlines the work of the Small Pots Delivery Group. It sets out the Delivery Group’s recommendations and confirms the government’s proposed approach in some areas relating to the design and implementation of a multiple default consolidator solution.

We are pleased to have contributed to the report through our role on the Technical and Administration Expert Panel that assists the Small Pots Delivery Group.

An industry led Feasibility Review will now be undertaken to determine the central infrastructure needed to support this solution. Legislation to enable the government to implement the proposed solution is also set to be included in the Pension Schemes Bill, expected this summer

Welcome to the March 2025 edition in our Pensions in a Pod podcast series. This series keeps you informed on topical issues within the pensions and benefits world.

We are pleased to share with you our latest episode of Pensions in a Pod, where industry specialists Tim Smith, Emma King, and Gemma Hanley explore the pressing issue of non-compliance with section 37, following the landmark Virgin Media judgments. As this issue evolves, our specialists help you stay ahead of the curve.

Our discussion highlights include:

• Reactions to Virgin Media Judgments: Discover how schemes and sponsors are responding to these rulings
• Auditors' Approaches: Gain insights into the approaches auditors are taking
• Verity Trustees v Wood: Explore the implications of this recent High Court case, which promises to clarify several unresolved questions surrounding s.37
• Potential Government Intervention: Understand the likelihood and potential impact of possible government actions

DC Practical Notes is our quarterly thought-leadership report, giving trustees, employers and providers of defined contribution (DC) pension schemes insight into what we are encountering in practice and our market-leading commentary on several key legal issues. With the Pensions Regulator announcing a new approach to supervision for DC schemes and the government’s drive for greater investment in the UK, we explore these proposals and other key developments.

With under one week to go to our annual UK Pensions Conference, Simon Daniel sits down with Tessa Page, Partner and UK Wealth Strategy Leader at Mercer.

Join them as they discuss the government’s stance that pension schemes should do more to invest in UK economic growth, as well as questions such as:

• If growth is the challenge is investment the solution?
• Will the policy deliver economic growth?
• DB surplus extraction - should the government offer protections?
• Is mandating schemes to invest in the UK a step too far?
• What lessons can we learn from Australia?

As part of the Advice Boundary Guidance Review, the FCA has published CP24/27 on a new targeted support regime allowing FCA regulated firms to support pension savers in a new way.

This follows the government’s proposals for closing the advice gap set out in discussion paper DP23/5 in December 2023. Please see our DC Practical Notes - February 2024 for further detail.

The FCA believes targeted support will help bridge the gap between impartial guidance and regulated holistic advice and better enable consumers to make informed decisions.

The deadline for responding to consultation is 13 February 2025. The FCA proposes to consult on the new rules in the first half of 2025.

In the Budget, the Chancellor announced several changes to the Inheritance Tax (IHT) regime. This includes plans to bring most unused pension funds and death benefits payable under registered pension schemes and qualifying non-UK pension schemes within the value of a person’s estate for IHT purposes from 6 April 2027.

Income tax may also be payable by the recipient of these benefits.

The government has launched a technical consultation, which focuses on the processes required to implement these changes rather than the merits of the proposal. The consultation closes on 22 January 2025.

Earlier this month, the Royal Mail launched the UK’s first collective DC (CDC) scheme. The following day, the government published a consultation on changes to the existing CDC legislation to enable unconnected multi-employer CDC schemes to be established.

This would be a major step in the development of CDC in the UK, as it would open up the potential for CDC schemes to be offered by commercial providers, including master trusts.

The consultation only relates to “whole life” CDC, which is where a CDC scheme gives members a full savings and retirement journey. The proposals do not (yet) include the option for providers to offer decumulation-only CDC.

It has been a long time coming but the new defined benefit funding regime is finally falling into place.

The Pensions Regulator’s new funding code of practice (the Code) has now been laid before Parliament. We also have the final “Fast Track” parameters and two consultation responses, on the Code and on the Fast Track.

This speedbrief highlights six points trustees and employers of DB schemes should know about in relation to the Code and the new funding regime, and suggests some actions.