The UK Pension Schemes Bill 2025 – All the Fun of the Fair

By Claire Dimmock on July 2, 2025 Posted in UK Pensions

Who doesn’t love a good fairground ride? The Pension Schemes Bill certainly caters for every taste. It covers a wide variety of provisions, from thrill-seeking measures intended to capitalise on the vast amount that is saved in UK pension funds, through to measures likely to appeal to a more sedate nature, such as amendments to legislation that doesn’t quite work in the current economic and political climate.

In a September 2024 report by the Pensions Policy Institute (PPI), the PPI estimated that the assets of the UK pension sector ‘towards the end of 2023’ were valued at just under £3 trillion, with defined benefit (DB) representing 55% and defined contribution (DC) having topped £1 trillion towards the end of 2023. It is worth noting that of that £3 trillion, workplace pensions account for over £2 trillion in assets. It is no small wonder then that this has been the focus of the chancellor’s pensions reform.

So far as growing the economy is concerned, the chancellor has adopted the approach of juggling three balls in the air at the same time. These are: (1) the introduction of measures to scale up DC pension funds so that they are in a better position to invest in a broad range of assets, including illiquid assets such as infrastructure and the UK’s private markets, (2) implementation of a framework for DB commercial consolidators, to facilitate scale in the DB sector, and (3) the introduction of measures to facilitate the release of pension fund surpluses in DB schemes back to employers and pension scheme members, with the intention that this then flows back into the UK economy.

Time for Some Spring Cleaning? Ombudsman’s Determination Shows Need to Press on With GMP Equalisation

By Claire Dimmock on May 1, 2025 Posted in UK Pensions

With the Pension Schemes Bill on its way in “late Spring”, now might be a good time for trustees to take stock of their trustee agendas and to brush off some items that may have been left to gather dust. A recent Pensions Ombudsman determination serves as a useful reminder that, for most schemes, GMP equalisation is not yet done and dusted.

Countdown To The First Own Risk Assessment

By Kate Bailey on April 2, 2025 Posted in UK Pensions

It is just over a year since The Pensions Regulator’s (TPR) general code of practice came into force. In the last year, our clients have made good progress towards compliance, with trustees working with internal teams and external advisers to review and update their practices and procedures, and to ensure that these are documented, leading to strengthened governance frameworks.

Many schemes have a year-end date of 31 March or 5 April, meaning that trustees of these schemes now have 12 months until the date on which the first Own Risk Assessment (ORA) must be carried out in spring 2026.

As a reminder, an ORA must be carried out if a scheme has more than 100 members. It is an assessment of how well a scheme’s Effective System of Governance (ESOG) is working and the way that potential risks are managed. The ORA must be documented. In our latest video, commemorating the first birthday of the general code coming into force, my colleague Matthew Giles suggests that trustees should count backwards from the date of their first ORA, to ensure that compliance plans are on track. Trustees should rework their timetable if there have been any changes of circumstances since it was first formulated.

If progress has slowed, try to identify why this has happened. Is there a weak link in the chain? Have all advisers delivered what they promised? Is the pensions manager overloaded with other priority work? Try to agree sensible timescales for progress, or consider reallocating the work.

Waffles, Passports and Trustee Directors – Part Two

By Claire Dimmock on February 26, 2025 Posted in UK Pensions

Part one of this blog covered the new requirement for company directors (including trustee directors) and persons with significant control to verify their identity with Companies House. They will be able to do this voluntarily from 25 March 2025 (the week during which national cocktail-making day, national cleaning week and international waffle day will be celebrated in the US). This requirement is part of measures introduced under the Economic Crime and Corporate Transparency Act 2023 (ECCTA). But are these measures proportionate? Surely there can’t be that many companies in England and Wales registered for fraudulent purposes?

In 2023, the BBC reported that between June and September of that year alone, over 80 companies had been set up using the residential addresses of unsuspecting people living in the same street in Essex. Experts speculated that these companies had been registered in order to launder money or to take out bank loans before closing down the companies and disappearing.

In another case in March 2024, one individual managed to file 800 false documents at Companies House in a short space of time, which recorded the false satisfaction of charges registered by lenders against a total of 190 different companies. Having an accurate register of charges at Companies House is important because it governs the order of priority of payment of debts and, if a company is in financial difficulties, it influences the route by which administrators are appointed and to whom notice must be given.

Waffles, Passports and Trustee Directors – Part One

By Claire Dimmock on February 26, 2025 Posted in UK Pensions

What will you be doing during the third week of March? According to a US website, there will be various celebrations underway. Perhaps you will be making the most of national cocktail-making day, or maybe national cleaning week will grab your attention. (Although, on a personal note, I am happy to say that it is not national cleaning week in the UK.) While reading through the possible celebrations (and the list is endless), international waffle day rather caught my eye.

If you are a director of a corporate trustee, however, you might be creating, or logging into, your GOV.UK One Login account. *From 25 March, a Companies House timeline indicates that directors of UK registered companies should be able to undertake voluntary verification of their identity. This will become a mandatory requirement during the autumn of 2025. Directors of existing companies, including directors of corporate trustees, will be required to undergo this new identity checking measure as part of their company’s annual confirmation statement. You can find out the date by which your company must submit its annual confirmation statement by heading to the Companies House website and searching against your company’s name.

Given that there is a 14-day window in which to submit an annual confirmation statement, before penalties might be incurred, it makes sense to tackle the verification process well in advance of the deadline. Pensions managers and company secretaries, take note – you never know which trustee directors are going to decide to take a last-minute holiday and head off to the sun (or snow) or worse still, a round the world cruise with no Wi-Fi connection, oblivious to the need to verify their identity before falling foul of the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

SECURE Act 2.0 Mandatory Automatic Enrollment Requirements for New Retirement Plans Guidance Released

By Elise Norcini and Joe Yonadi on February 7, 2025 Posted in Tax, US retirement plans

One of the hallmarks of the SECURE 2.0 Act of 2022 (SECURE Act 2.0) legislation was to increase participation in retirement plans. On January 10, 2025, the Treasury Department and the IRS came one step closer when they announced the issuance of proposed regulations requiring automatic enrollment for new Code Section 401(k) and 403(b) retirement plans (Proposed Regulations). As background, the SECURE Act 2.0 added Code Section 414A, which provides that a retirement plan will not be qualified unless it satisfies certain automatic enrollment requirements under Code Section 414(w). These requirements:

Require automatic enrollment of employees with elective deferral contributions of at least 3% and no more than 10% in the first year of participation (with 1% increases between 10-15%)
Permit participants to withdraw their automatic elective deferrals within 90 days of their first elective deferral contributions being made
If no investment election is made, permit the automatic elective deferrals to be invested in qualified default investment alternatives (QDIAs)

The Department of Labor (DOL) Adopts Self-Correction for Common Retirement Plan Fiduciary Breaches

By Stacey Grundman and Joe Yonadi on February 5, 2025 Posted in Tax, US, US retirement plans

For the first time since the DOL adopted its Voluntary Fiduciary Correction Program (VFC Program) in 2002, retirement plan sponsors will be able to utilize self–correction as an efficient means to correct their most frequent compliance failures – late transmittals of participant retirement plan contributions and retirement plan loan repayments.

The DOL finalized an update to its VFC Program adding the Self-Correction Component (SCC) for these fiduciary failures and, additionally, finalized an amendment to an existing prohibited transaction exemption (PTE) that provides excise tax relief for transactions that have been self-corrected.

The SCC feature and excise tax relief become effective on March 17, 2025.

Twenty Five Years of Pensions − Don’t Look Back In Anger

By Lynn Housecroft on October 15, 2024 Posted in UK Pensions

I have been pondering the fact that we are coming up to a quarter of the way through the century. When Big Ben chimes in the new year, it will be 2025. How did that happen? And what has changed in the pensions industry so far this millennium?

In the first week of the year 2000, the pensions industry was relieved that the “millennium bug” that we feared would plague our computer systems turned out to be a damp squib among the new year fireworks. We began the new century grappling with issues such as access to stakeholder schemes and the implications of pension sharing on divorce.

A few years later, we had the Pensions Act 2004, which unpicked some of the issues introduced by the Pensions Act 1995 that were not working well. For example, the scheme-specific funding regime replaced the unsatisfactory minimum funding requirement. The 2004 Act also introduced The Pensions Regulator − replacing OPRA, which did not have enough powers to have any real impact.

It’s A Fair Challenge! Penalty Decisions Examined

By Zoya Alam on October 3, 2024 Posted in UK Pensions

In recent years, The Pensions Regulator (“TPR”) has been steadfast in enforcing compliance among pension scheme trustees and employers, often issuing penalties for non-compliance. However, recent cases indicate that with a valid reason, it is possible to contest and even overturn penalties. Here, we examine three noteworthy tribunal decisions that shed light on the courts’ willingness to scrutinise TPR’s rigid application of penalties and underscores the importance of fairness and proportionality in regulatory enforcement.

Caldwell v TPR: Flexibility in Exceptional Circumstances

Background

In Caldwell (Trustee of the Smith & Wallace & Co 1988 Pension Plan) v The Pensions Regulator [2024], TPR issued a penalty to Caldwell for failing to prepare a chair’s statement by the required deadline (within seven months of the end of each scheme year). This annual governance statement is mandatory for defined contribution pension schemes, and failure to submit it incurs an automatic fine between £500 and £2,000.

Employer Indemnities – Will They Work If Push Comes to Shove?

By Squire Patton Boggs on August 11, 2024 Posted in UK Pensions

To what extent does your trustee board understand the various ways in which they might be protected if things go wrong and claims are made against them? It is a difficult topic to think about, as no trustee ever wants to be on the receiving end of a claim. If your trustee board has not considered trustee protection for a while, or if there have been changes to the trustee board, it is well worth revisiting this important subject.

Changes within the sponsoring employer can also impact trustee protection. An employer indemnity is commonly used to add a layer of protection to the trustees’ armour. But just how valuable are these protections and what may impact their value? My latest Pensions Life Hack offers some tips. For more information on trustee protection in general, see our Quick Guide.