Key Takeaways
- • The Pension Schemes Act 2026 received Royal Assent on 29 April 2026, introducing reforms including trustee surplus release powers, a DB superfund authorisation regime, a DC value-for-money framework, DC megafund scale requirements, and abolition of the PPF administration levy, with most provisions phased in over the next four years.
- • The National Insurance Contributions (Employer Pensions Contributions) Act 2026 also received Royal Assent on 29 April 2026, and the government intends to cap the NIC exemption for salary sacrifice pension contributions at the first £2,000 per annum from 6 April 2029.
- • The PRA is consulting on proposed funded reinsurance rules that would materially raise capital requirements, with the consultation closing on 31 July 2026 and the new requirements proposed to apply from 1 October 2026 and take effect on 1 July 2027.
- • TPR's market oversight report finds most large schemes have connected to pensions dashboards, but value data preparations lag personal data work significantly.
- • The Investment Consultants Sustainability Working Group updated its five-theme framework for assessing investment consultants' climate competency, and TPR's revised CDC code is expected to take effect in mid-October 2026.
Summary
The Pension Schemes Act 2026 received Royal Assent on 29 April 2026, according to Mayer Brown's May 2026 Pensions Brief. The legislation provides trustees with new powers to release surplus from ongoing defined benefit schemes, creates an authorisation and supervision regime for DB superfunds, and introduces a DC value for money framework. It also enables scale and potentially asset allocation requirements for default arrangements in authorised DC master trusts and group personal pension schemes, establishes automatic consolidation of small deferred DC pots, and requires DC schemes to offer default retirement solutions. Other provisions remedy potentially invalid past amendments to contracted-out rights following the Virgin Media case, remove the restriction preventing the Pension Protection Fund from reducing its levy below £100 million, and abolish the PPF administration levy. Apart from the Virgin Media remedy, which is now in force, the provisions will be phased in over the next four years according to the government's indicative timeline. Mayer Brown advises trustees and employers to begin preparations now.
Separately, the National Insurance Contributions (Employer Pensions Contributions) Act 2026 also received Royal Assent on 29 April 2026. It empowers the government to limit the NIC exemption for employee pension contributions made through salary sacrifice arrangements, and the government intends to restrict the exemption to the first £2,000 of contributions per annum from 6 April 2029. Employers operating such arrangements should assess the payroll implications ahead of that date.
On the DB side, the Prudential Regulation Authority is consulting on proposed changes to funded reinsurance rules, where insurers transfer investment and/or longevity risk from bulk annuity transactions to reinsurers. The PRA expects the changes to result in materially higher capital requirements. The proposed requirements would take effect on 1 July 2027 but apply to business transacted from 1 October 2026, with the consultation closing on 31 July 2026. Trustees should consider whether the proposals could affect bulk annuity pricing.
TPR's market oversight report on dashboards connection found most large schemes have connected and are increasing focus on data, though personal data work continues and value data preparations lag significantly. TPR has updated its dashboards guidance with two checklists and the Pensions Dashboards Programme has issued guidance on operational failure scenarios and error handling.
In the fraud area, the Fraud Minister urged trustees and administrators at a Pension Scams Action Group webinar attended by more than 550 participants to reinforce scam warnings at every member touchpoint. The PSAG leaflet now includes the FCA Firm Checker tool. TPR's revised code of practice for collective DC schemes has been laid before Parliament to reflect the extension of the CDC regime to unconnected multi-employer schemes from July 2026, with entry into force expected in mid-October 2026.
Separately, the National Insurance Contributions (Employer Pensions Contributions) Act 2026 also received Royal Assent on 29 April 2026. It empowers the government to limit the NIC exemption for employee pension contributions made through salary sacrifice arrangements, and the government intends to restrict the exemption to the first £2,000 of contributions per annum from 6 April 2029. Employers operating such arrangements should assess the payroll implications ahead of that date.
On the DB side, the Prudential Regulation Authority is consulting on proposed changes to funded reinsurance rules, where insurers transfer investment and/or longevity risk from bulk annuity transactions to reinsurers. The PRA expects the changes to result in materially higher capital requirements. The proposed requirements would take effect on 1 July 2027 but apply to business transacted from 1 October 2026, with the consultation closing on 31 July 2026. Trustees should consider whether the proposals could affect bulk annuity pricing.
TPR's market oversight report on dashboards connection found most large schemes have connected and are increasing focus on data, though personal data work continues and value data preparations lag significantly. TPR has updated its dashboards guidance with two checklists and the Pensions Dashboards Programme has issued guidance on operational failure scenarios and error handling.
In the fraud area, the Fraud Minister urged trustees and administrators at a Pension Scams Action Group webinar attended by more than 550 participants to reinforce scam warnings at every member touchpoint. The PSAG leaflet now includes the FCA Firm Checker tool. TPR's revised code of practice for collective DC schemes has been laid before Parliament to reflect the extension of the CDC regime to unconnected multi-employer schemes from July 2026, with entry into force expected in mid-October 2026.
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