Pensions Bulletin 2026/31
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This edition: TPR updates DB superfunds guidance, HMRC updates on next steps in journey to new IHT regime and Unconnected multi-employer CDC schemes can now apply for authorisation.
TPR updates DB superfunds guidance
The Pensions Regulator has updated its interim guidance for defined benefit superfunds. The changes are limited and are designed to preserve the existing operation of the superfund wind-up trigger following the introduction of prospective indexation for eligible pre-1997 PPF compensation from January 2027.
Previously, the wind-up trigger was set at 105% of a scheme’s section 179 funding level. It will now be set at 105% of an “Adjusted Section 179 funding level”. This will use the usual PPF section 179 assumptions, except that it assumes no increases in payment for pensions accrued before 6 April 1997. The adjustment prevents a mechanical shift in the trigger arising solely from the new PPF indexation. The new definition applies only for this superfund wind-up trigger: it does not change section 179 valuations for other purposes, or PPF compensation.
TPR has also adjusted its guidance for future mortality improvements in minimum technical provisions. Superfunds should use “appropriate parameters” with the CMI projection model, rather than simply using the “core” parameters. This includes reflecting socio-economic factors where these suggest higher rates of improvement than implied by the core parameters.
Comment
The revised wind-up trigger is a sensible technical adjustment. It prevents the new PPF compensation increases from changing the point at which a superfund must begin to wind up, while leaving members’ actual PPF compensation unaffected. The mortality adjustment is also useful flexibility for superfund technical provisions to allow appropriately for their particular membership profile, rather than simply relying on the core parameters in the standard model.
HMRC updates on next steps in journey to new IHT regime
For any deaths on or after 6 April 2027, most unused pension funds and death benefits will come within the scope of inheritance tax (IHT). With this date drawing ever nearer, HMRC’s Pension Schemes Newsletter 183 notes the recently laid information sharing regulations (see Pensions Bulletin 2026/29) and gives details of what updates to regulations and guidance we can expect to see next.
Regulations are expected to be laid later in the year making consequential amendments to tax legislation to allow for the new IHT regime in special circumstances (sub-schemes and excepted estates). Also, as promised in HMRC’s technical note published in May (see Pensions Bulletin 2026/19) a further technical note is expected to be published later in the summer containing information on withholding and payment notices, scenarios to illustrate the processes surrounding the new requirements and addressing common queries.
HMRC has also published the latest statistics for pension flexibility payments in the newsletter and announced a delay in the publication of the annual transfer statistics for qualifying recognised overseas pension schemes. The remainder of the newsletter notes the draft legislation introducing authorised member surplus payments (see Pensions Bulletin 2026/28) and reminds readers of reporting requirements for relief at source schemes, changes to procedures for contacting HMRC, and the closure of the pension schemes online service in April 2027.
Comment
The industry is rightly concerned about how tight the timescales are for setting up the necessary processes for the new IHT regime, and in particular about how close to 6 April 2027 some of the guidance is expected to be published. This newsletter does little to allay those fears.
Unconnected multi-employer CDC schemes can now apply for authorisation
The legislation extending the collective defined contribution (CDC) regime to unconnected multi-employer schemes (UMES) came into force on 31 July 2026. Prospective schemes can now apply to TPR for authorisation. This completes the next major stage of the CDC framework (see Pensions Bulletin 2025/43).
The other key elements needed for the new regime are now also in place. TPR’s updated CDC Code of Practice came into force and its guidance material published on the same date, setting out how it will assess and supervise UMES authorisation applications. Regulations also now permit bulk transfers of money purchase benefits without guarantees to an authorised CDC scheme without member consent and without the requirement for written advice from an “appropriate adviser” (see Pensions Bulletin 2026/27 and Pensions Bulletin 2026/23 respectively).
The Financial Reporting Council also published the final version of the actuarial standard TAS 310 in July, effective from 31 July 2026. Compared with the consultation draft (see Pensions Bulletin 2026/06), the FRC notes that the final version has been updated to allow for practical considerations and clarifications. To this end, the FRC has published guidance to support actuaries advising on the “actuarial equivalence” requirement.
Comment
The completion of the legislative and regulatory framework for this stage of the development of CDCs is an important milestone. It provides a firm platform for UMES to develop, while the next stage — the proposed framework for retirement CDC arrangements — could further broaden the ways in which collective solutions can support members saving for retirement.
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