Pensions Bulletin 2026/15
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This edition: Pension Schemes Bill – Commons rejects all the Lords’ amendments and TUPE call for evidence asks about pension protections.
Pension Schemes Bill – Common rejects all the Lords’ amendments
Shortly after this week’s Prime Minister’s Questions, in proceedings that concluded with a debate on the regulation of the marmalade market, the House of Commons considered the House of Lords’ many amendments to the Pension Schemes Bill on which we have previously reported and rejected every single amendment made in the House of Lords that was not of the Government’s making. A document published on 10 April 2016 makes clear that this was the Government’s intention.
Mandation compromise put forward
Most notably, all the amendments made in the Lords that stripped out the Government’s controversial asset allocation mandation reserve power (see Pensions Bulletin 2026/12) were rejected by the Commons. This power, which is very widely drawn, enables the Government to require the largest master trusts and group personal pension schemes to have an as yet unstated minimum exposure to unlisted asset classes of the Government’s making, including potentially limiting that exposure to UK-based assets.
The Government now intends to limit the scope of this power through an amendment which will restrict it so that no more than 10% by value of assets held in default funds of the affected scheme are potentially affected (through needing to be “qualifying assets”) and no more than 5% by value of assets potentially need to be of a “UK-specific description”. This last point is defined as “a description framed by reference to whether an asset is located in the United Kingdom or meets any other condition linked to economic activity in the United Kingdom.”
This Government amendment broadly mirrors the voluntary May 2025 Mansion House Accord in which a limited set of 17 DC providers and master trusts agreed (but were not legally bound) to target investing 10% of their default funds in private markets by 2030, with half of that commitment expected to be directed towards UK private markets. The Accord was also subject to trustee fiduciary duties and was clear that this ambition was also dependent on supporting actions by the Government (see Pensions Bulletin 2025/19). These latter points do not appear to have been considered in the new amendment, nor has the Government made any changes to the proposed backstop date of 2035 for this power.
Next steps and Roadmap update promised
Now that the Commons has had its say, the Bill goes back to the Lords. The Government is under some time pressure now if it wants to get the Bill passed through to Royal Assent before this Parliamentary session ends – as the Prorogation Order for this has now been published stating that this will occur between 29 April 2026 and 6 May 2026. The next Parliamentary session will begin with the King’s Speech on 13 May 2026.
Finally, Baroness Sherlock for the Government has stated that the Government will publish an update to its roadmap that was published in June 2025 when the Pension Schemes Bill was introduced to Parliament (see our News Alert). Presumably, there will be some changes to the consultation and implementation dates set out then.
Comment
The main issue now will be whether the Government’s compromise wording on mandation will placate the Lords, many of whom were objecting in principle to any Government having such a power. We should find out on 20 April 2026 when the Lords need to decide whether to give up or engage in another round of ping pong with the Commons.
TUPE call for evidence asks about pension protections
The Department for Business and Trade, as part of its “Make Work Pay” programme, has issued a call for evidence to inform development of policy options to reform the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations. The Government also intends to use this evidence to update its understanding on the prevalence and experience of TUPE transfers.
The TUPE Regulations can apply when a business, service or part of an undertaking changes hands, transferring employees to the new employer on their existing terms and with continuity of employment preserved.
In a pensions context, TUPE requires the new employer to replicate the existing terms of a workplace personal pension scheme and it requires minimum contributions to money purchase occupational pension schemes in specified circumstances. However, TUPE does not generally apply to rights under occupational pension schemes except for rights which are not “old age, invalidity or survivors” benefits where TUPE does apply.
The call for evidence asks a range of questions about the operation of TUPE and includes the question to “what extent do you agree or disagree that employee pension rights are sufficiently protected under a TUPE transfer?”
The call for evidence closes on 1 July 2026.
Comment
It is not clear what the pensions question is aimed at. The pension rules for TUPE transfers are well understood apart, that is, from the dreadful legal muddle about the scope of “old age, invalidity or survivors” which can unduly complicate business sales. Perhaps the Government will take the opportunity to fix this?
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