Issues Affecting All Schemes
Private Market Investment: Pensions Regulator Report
The Pensions Regulator (TPR) has published a market oversight report on investment by UK pension schemes in private markets, particularly UK private markets. Key findings include:
- Trustees are open to UK private market investments if the investments offered meet the scheme’s investment needs and characteristics. DC schemes and master trusts with the necessary scale and capacity have made significant progress, but appetite is limited among DB schemes to invest in private markets beyond private credit or certain types of infrastructure and real estate.
- Schemes tend to invest in funds that offer blended access to some combination of private credit, infrastructure, property and private equity. There is much less interest in venture capital.
- Potential barriers to investment in private markets include a possible trustee knowledge gap, concerns around fiduciary duty, market uncertainty, concerns around fee structure and transparency, and the lack of availability of an investible pipeline of assets.
TPR recommends a number of actions for trustees, including improving knowledge and understanding, reviewing their adviser support, strengthening their investment risk management controls and exploring the range of investment implementation opportunities.
Action
Trustees should review the report and consider whether they should take any action in light of TPR’s recommendations.
Taxation of Lump Sum Death benefits: Proposed Simplification
HM Revenue & Customs has announced that the government will legislate to simplify the taxation of certain lump sum death benefits paid in excess of the member’s lump sum and death benefit allowance. Any tax due on these payments will still be charged at the beneficiary’s marginal rate of income tax. However, the amount above the allowance will no longer count as pension income for other tax purposes. Schemes’ reporting obligations will not be affected.
The announcement does not indicate the timing for the legislation.
Action
Trustees and administrators should monitor publication of the legislation.
TPR: New Enforcement Approach
TPR has published its new enforcement approach which sets out:
- Its enforcement strategic objectives;
- The approach it follows;
- The enforcement toolkit it uses.; and
- How it decides to act.
The new approach is intended to build on TPR’s existing strengths while introducing a more focused, agile, and outcomes-driven model that is better aligned with the changing risks in the pensions landscape, with a stronger emphasis on delivering real-world results.
TPR has also responded to its September 2025 consultation on the new enforcement approach.
Action
No action required—for informational purposes only.
State Pension: Replacement of Triple Lock
The Prime Minister has announced that, from April 2030, the government will replace the state pension triple lock with a new double lock, removing the current link to average wage growth. Under the new double lock, the state pension would increase by the greater of inflation and 2.5%.
Action
No action required—for informational purposes only.
Information Commissioner’s Office: Replacement Body
The Information Commissioner’s Office has been replaced by a new body, the Information Commission, as of 30 September 2026. The new body has the same regulatory functions and responsibilities as the Information Commissioner’s Office and will continue to be known as the ICO. The change does not have any impact on data protection law.
Action
No action required—for informational purposes only.
Issues Affecting DB Schemes
GMP Conversion: Consultation on Proposed Changes
The government is consulting on draft regulations setting out:
- Revised conditions that must be met in relation to survivors’ benefits in a GMP conversion exercise. These include that the survivor must receive half of the pension the member accrued during the relevant period, as opposed to just half of the member’s GMP. The relevant period is 6 April 1978 – 5 April 1997 where the survivor is a woman in an opposite sex marriage, and 6 April 1988 – 5 April 1997 in all other cases (including where the survivor is a woman in an opposite sex civil partnership).
- Revised requirements on who must consent to the conversion. This will be anyone who is an employer for the purposes of the statutory scheme funding regime. Multi-employer schemes will be able to nominate a single employer to act on their behalf.
- A new option for the certification of actuarial equivalence when the benefits of only one individual member are being converted at a time.
The regulations will not have retrospective effect. Schemes that have started the process of consulting members regarding GMP conversion at the time the regulations come into force would continue using the current legislation, unless they chose to reconsult with their members, in which case the amended legislation would apply. The consultation closes on 29 October 2026. The government has not indicated when the amended legislation might come into force.
Action
Trustees and employers of schemes which hold GMPs should monitor the outcome of the consultation.
GMP Revaluation: Consultation on Proposed Fixed Rate
The government is consulting on maintaining 3.25% as the annual rate of fixed rate GMP revaluation for early leavers who leave pensionable service between 6 April 2027 and 5 April 2032. The consultation closes on 29 October 2026.
Action
Trustees and administrators of schemes which provide fixed rate GMP revaluation should monitor the outcome of the consultation.
Early Retirement Rights: Pensions Ombudsman Determination
The Deputy Pensions Ombudsman (DPO) has decided that a right for active members to retire at age 55, rather than at 60, was an early retirement benefit, and therefore liability to provide that benefit transferred to the receiving employer on a business transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
The member in question began employment with her original employer in 1986 and joined its pension scheme. Under the scheme rules, she had a normal pension age (NPA) of 55. However, the rules also provided that, where a member resigned, preserved benefits were payable from age 60. In 2011, the member’s employment was transferred under TUPE to a new employer, but her accrued pension benefits remained in the original employer’s scheme. In 2019, the member’s employment transferred back to the original employer under TUPE, but she was not able to rejoin the scheme.
A dispute arose between the original employer and the member about whether she was entitled to retire with unreduced benefits at age 55 or 60. In prior court proceedings, the Court of Appeal held that the 2011 TUPE transfer amounted to a resignation for the purposes of the scheme rules and that the member was therefore entitled to retire with unreduced benefits at age 60, not 55.
The member argued before the DPO that her right to retire at age 55 had transferred to the new employer and back to the original employer under TUPE, while the original employer argued that as her NPA at the time of the 2011 transfer was 55, her right to retire at that age was an old age benefit and therefore did not transfer. The DPO decided that it was necessary to look at the scheme as a whole, rather than solely at the definition of NPA. She concluded that, within the structure of the scheme, age 60 was the end of an employee’s normal working life, even for members with an NPA of 55. The rules granted an early retirement right to members who remained in service as active members to age 55. Liability to provide this early retirement right had therefore transferred under TUPE to the new employer in 2011 and back to the original employer in 2019.
Action
No action required—for informational purposes only.
Issues Affecting DC Schemes
Small Pots: Consultation on Automatic Consolidation System
The government is consulting on the proposed framework for the automatic consolidation of small, deferred DC pots. Key points include:
- To be in scope for consolidation, a pot must have been deferred for at least 12 months and have a value of under £1,000.
- The framework will initially apply to default arrangements in automatic enrolment schemes with 100+ members.
- Consolidator schemes will be required to meet and maintain high standards and will be subject to ongoing scrutiny from regulators.
The consultation also covers areas such as:
- The treatment of pots in Sharia-compliant funds and pots with guarantees and protected pension ages;
- Establishment of a central oversight body with responsibility for setting data standards, messaging standards, matching requirements and consolidator allocation rules.; and
- Introduction of additional employer automatic enrolment duties to support data matching.
The consultation closes on 17 November 2026. A further consultation is planned for late 2027/early 2028.
Action
Trustees of automatic enrolment schemes with 100+ members should monitor the outcome of the consultation.
Guided Retirement: Industry Guidance on Operational Readiness
The Pensions Administration Standards Association has published guidance to help schemes begin assessing how ready they are to deliver guided retirement in practice. The guidance includes a checklist of practical questions covering strategy, systems, data, governance, communication, risk and compliance, and delivery planning.
Action
No action required, but trustees of DC schemes may find the guidance helpful as they begin to consider how they will comply with the guided retirement duties.
Mayer Brown News
Updates
Henry Corrigan and Gareth Davies are presenting a session on trustee duties, legal responsibilities and surplus decision-making at the Pensions Management Institute’s Endgame Solutions Conference on 6 October 2026. Their session will explore how to navigate surplus and benefit improvement discussions while protecting member outcomes. This will include managing conflicts, taking appropriate advice, reaching robust decisions which fulfil legal duties, and evidencing the decision-making process.
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