Pensions Bulletin 2025/34

Pension Schemes Bill – responses start to appear to the Committee’s call for evidence

With the House of Commons returning next Monday 1 September, albeit only until 16 September when it goes into recess for the party conferences, the focus turns once more to the Pension Schemes Bill, with a number of organisations responding to the call for evidence (see Pensions Bulletin 2025/27) to assist the House of Commons’ Committee stage, which starts on 2 September.

For example, the Society of Pension Professionals, in its response, available via its consultations and formal responses webpage, is very supportive of the Bill, making recommendations that it believes will help to further improve the Bill.

On the DB side of the Bill, of particular note is the call for an amendment to the Bill to allow for the abolition of the PPF administration levy (see Pensions Bulletin 2025/27).

The SPP also calls for the removal from the Bill of the proposed time limited power to compel certain DC pension funds to invest in a certain way if they fail to do so voluntarily. Related to this, earlier in August the SPP published a paper “Power in Principle? Balancing Mandation and Market Confidence”, available via its guides and reports webpage, which focused on this issue and on which the SPP raised a number of concerns, concluding that it is a measure it cannot support.

The SPP says that changes are needed to the DC default decumulation provisions (guided retirement) to make it fit for purpose. It is also not convinced that consolidation of multi-employer DC schemes will drive additional investment diversification or deliver better saver returns, saying that it could lead to unintended consequences of reducing competition, stifling innovation and potentially disadvantaging some minority groups.

The Pensions Management Institute says that it is supportive of the vast majority of measures in the Bill but is disappointed with what it sees as Government overreach in a number of areas of the Bill, in particular the reserve power to mandate investment in private markets which it believes should be removed from the Bill. And on the guided retirement proposals it is concerned about what it sees as a lack of regulatory alignment with adjacent initiatives such as the FCA’s targeted support proposals.

The Association of Consulting Actuaries is supportive of the proposed DB surplus sharing powers but calls for greater flexibility on the use of surplus than is currently being legislated for. On Superfunds it raises a number of technical concerns and asks whether all the DWP law applicable to DB schemes has been checked to ensure it works in the superfund context.

On DC matters the ACA says that the ability to mandate asset allocation is not in the best interests of schemes, their members or employers and should be removed from the Bill. It also has some concerns about what guided retirement will look like in practice. Separately it has concerns that the value for money framework as drafted risks penalising the governance bodies of schemes who are taking positive actions for the long-term.

SPP looks at what the Pensions Commission should consider

The Society of Pension Professionals has published a paper “Saving Retirement: Who is at Risk and Why?”, available via its guides and reports webpage, in which it examines what it thinks is needed and why in order that an adequate retirement income can be provided for all – the key focus of the Pensions Commission (see Pensions Bulletin 2025/29).

The paper is divided into three parts – covering what SPP members believe the Pensions Commission should consider, what benefits the Commission’s recommendations could help deliver, and, under the heading of “Building a plan”, some examples of the tangible actions the Commission could recommend.

The SPP concludes by saying that although there are some areas where the pensions industry “can get to work now”, there is a great deal that requires government intervention, including implementing long awaited changes to automatic enrolment.

Regulator calls on trustees to respond to the FCA’s targeted support consultation

As the deadline to respond to the Financial Conduct Authority’s targeted support consultation nears (see Pensions Bulletin 2025/26 – it closes on 29 August 2025), the Pensions Regulator is promoting a new joint podcast with the FCA which examines the need for trustees to understand and act on the diverse needs of DC savers so that the retirement pot is turned into retirement income.

The podcast speakers say that the FCA’s targeted support proposals, in which FCA-regulated firms make specific recommendations for groups or cohorts of consumers around pensions and investments, are complementary to the Pension Schemes Bill plans for guided retirement solutions. And as such, they call on DC trustees to respond to the FCA consultation with examples of the kind of support to members approaching retirement they would like to give within the existing framework to find out if this could be delivered themselves or with an FCA-authorised partner.

Regulator plays “pivotal role” in scheme rescue

The Pensions Regulator has published a regulatory intervention report relating to The Edinburgh Woollen Mill Ltd Retirement Benefits Scheme in which it says that it played a “pivotal role” in securing a scheme rescue after the sole employer became insolvent. The Regulator says that the scheme was headed either for the PPF or a PPF+ buyout solution, but with a new statutory employer now in place with which it maintained “an active dialogue”, and which has made a lump sum payment and agreed to a three-year recovery plan, the scheme should become fully funded on a low dependency basis in the next few years.

The report reveals that there were concerns about the circumstances leading up to the insolvency, including the payment of material dividends by the employer and the assignment of security from the group’s banks to the employer’s ultimate parent company.

As a result of these concerns, the Regulator did consider whether to use its anti-avoidance powers, but the new employer’s “proactive action” eliminated the need for it to pursue a formal anti-avoidance case, which the Regulator says could have led to years of uncertainty for members.