Pensions Bulletin 2026/24

New DB surplus flexibilities  

As promised last week, we have now published a News Alert that provides a summary, together with analysis and comment, of the new surplus flexibilities regime set out in the DWP consultation including the draft regulations, and the accompanying statement from the Pensions Regulator. 

We now await the outcome of the consultation, which ends on 2 September 2026, and the technical actuarial guidance promised by the Financial Reporting Council to support scheme actuaries in providing the actuarial certification required under the proposed new legislation. 

DB pension regulation – ministerial statement  

On 16 June the Pensions Minister, Torsten Bell (and his counterpart in the Lords) made a written statement to announce that the government are “taking action to ensure the strong regulatory framework for Defined Benefit pensions remains effective as innovation develops, to manage future risks and protect member benefits”.  

The statement goes on to refer to last year’s innovative transaction by which the Stagecoach Group Pension Scheme was transferred to the Aberdeen Group, stating that “We want to encourage innovation that has the potential to benefit scheme members throughout the pension system and need to ensure the right legislative guard rails are in place for this to happen safely”. The statement also notes that the “flexible apportionment arrangement” (FAA) mechanism was utilised in this case in a compliant fashion, although it did so in a way that was not anticipated when the mechanism was introduced. An FAA is a legislative mechanism that allows an employer to exit a shared DB scheme by transferring its liabilities, usually to another employer, without immediately triggering an employer debt.  

The DWP therefore intends to review this area of legislation to ensure “the regulatory standards and safeguards evolve and keep pace with … innovation in the pension market”. This is “to protect members and the Pension Protection Fund …”. It will consult in due course on whether and how existing FAA regulations could be strengthened. 

No indication of the timescale for this review is given beyond “in due course”.

DWP launches fourth triennial review of auto-enrolment alternative quality tests  

The DWP has published a call for evidence on the operation of certain tests that employers can use to demonstrate that their DB, hybrid or CDC scheme is of sufficient quality for auto-enrolment purposes. These tests are an alternative to having to prove that a scheme meets the potentially burdensome “test scheme standard” as was set out in the original auto-enrolment legislation. 

The Pensions Act 2008 governing these alternative tests requires the tests to be reviewed every three years. As the last review concluded in February 2024 (see Pensions Bulletin 2024/05), the DWP has several months before it needs to reach a landing on this review. 

As no changes were made following the previous review, much of this fourth review re-uses the same content and questions from three years ago. The extra addition in this call for evidence is to acknowledge the new “DC test” that unconnected multiple employer CDC schemes will be able to use. 

Consultation closes on 27 July 2026.

MaPS redesigns its pensions guide 

The Money and Pensions Service (MaPS) has launched a slimmed down version of the pensions guide that it makes available through MoneyHelper to help people engage with and better understand their options in the run up to retirement. 

The new publication, How to take your pension: a step-by-step guide (formerly known as 'Your pension: your choices') is shorter than the previous guide (which had been used since 2015) and has been redesigned to be clearer and easier to navigate.