Issues affecting all schemes
Cyber security – £14 million fine for breach
The Information Commissioner’s Office (ICO) has issued a penalty notice imposing a £14 million fine on Capita for infringements of the UK General Data Protection Regulation (UK GDPR) relating to a cyber security incident suffered by Capita in 2023. Following its investigation into the incident, the ICO concluded that Capita had breached its obligations under the UK GDPR to process personal data in a manner that ensures the security of that data and to implement appropriate technical and organisational measures to respond effectively to the incident. In particular, Capita had:
- Failed to prevent a single point of access expanding.
- Failed to respond appropriately to security alerts.
- Conducted inadequate penetration testing and risk assessment.
For more information, please see our legal update.
Action Trustees and administrators should review their cyber security arrangements in light of the ICO’s decision.
Statutory transfer rights – conditions that must be met
In a determination concerning a 2015 transfer to a suspected scam vehicle, the Deputy Pensions Ombudsman (DPO) has declined to follow a 2016 High Court decision that, in order to have a statutory transfer right, a member must be earning income at the time of the transfer. The DPO concluded that the decision was not binding on the DPO, and that assuming all other requirements are met, a member has a statutory transfer right irrespective of whether they are earning income at the time of the transfer.
The DPO also decided that in the circumstances of the case there was no legal duty on the trustees of the transferring scheme to carry out any due diligence on the receiving scheme or the circumstances of the transfer request.
Action Trustees and administrators should bear the decision in mind when considering statutory transfer requests.
Collective DC schemes – extension of regime to unconnected employers
The government has responded to its consultation on amending the collective DC (CDC) regime to allow the establishment of unconnected multi-employer schemes. The consultation concludes that the proposed amendments will be made, and the necessary regulations have been laid before Parliament for approval. The amended regime, and a revised Pensions Regulator (TPR) code of practice on CDC schemes, will come into force on 31 July 2026.
Action No action required, but employers may wish to consider whether participation in an unconnected multi-employer CDC scheme would be of interest.
Member communications – use of disclaimers
In a determination upholding a member complaint regarding provision of incorrect information in a benefit statement, the Pensions Ombudsman (TPO) has noted that the inclusion of disclaimers in benefit statements is not always a “get out of jail free card”. It is still a question of fact whether it was reasonable for the member to rely on the inaccurate statement in the circumstances of the case, having regard to all other actions taken by the scheme. A disclaimer by itself is not always conclusive.
In this case, the member had called the scheme to check that the information provided in the benefit statement was correct. During that call, the scheme confirmed that the information was correct and provided a plausible explanation for the sudden increase in the member’s benefits. TPO concluded that this clear, verbal reassurance meant it was reasonable for the member to have relied on the incorrect information, notwithstanding the disclaimer in the benefit statement.
Action No action required, but trustees and administrators should bear this determination in mind when responding to member complaints regarding the provision of incorrect information in a document which includes a disclaimer.
TPO – update on operating model review
TPO has provided a further update on the progress of its operating model review. It is continuing to work towards becoming more efficient, with workstreams including:
- Providing information and tools to schemes and applicants to support earlier dispute resolution without the need to come to TPO.
- Continuing to expand its expertise to identify and resolve complaints earlier in its processes and to explore its thresholds to ensure it only focuses on complaints that need its expertise and cannot be dealt with elsewhere.
- Expanding the use of expedited determinations.
- Streamlining the current process for jurisdiction decisions and asking respondents for a formal response to complaints at an earlier stage.
- Focussing on the large cohort of complex cases that have built up.
The second limb of TPO’s strategy is to reduce demand for its service e.g. by encouraging the settlement of more complaints before they reach TPO. This has been working well so far, and TPO will continue to work with the industry to raise the profile of good dispute resolution processes, sharing good practice and the tools needed to enable early closure, while working with TPR to identify poor practice.
Action No action required.
Economic growth – update on TPR pledges
The government has published an update on the action plan it launched in March 2025 to ensure regulators and regulation support economic growth and innovation. With regards to TPR’s progress against the pledges it made as part of the plan, key points include:
- Reduction of unnecessary regulatory burdens – TPR has started identifying activities that do not add value for members whilst imposing burdens on schemes and will address these by March 2026.
- Improved data and data-sharing – TPR is on track to deliver proposals for appropriate data collection by March 2026.
- Encouraging consolidation and consideration of investment in productive assets – a consultation on reforms to the VFM framework will be launched in December 2025 and TPR will publish guidance to support the consolidation of smaller DC schemes where it is in members’ best interests.
Action No action required.
Artificial intelligence – use in pensions administration
The Pensions Administration Standards Association has published guidance on the use of artificial intelligence (AI) in pensions administration. The guidance provides practical support for schemes, administrators, and trustees on the opportunities and risks of using AI in administration. It highlights high-quality data as the bedrock of AI and sets out examples of current and emerging uses of AI in pensions, alongside clear risk management considerations.
Action No action required.
Issues affecting DC schemes
Retirement options – retirement CDC schemes
The government is consulting on policy proposals for a new type of CDC scheme which would only be used by pensioner members – a “retirement CDC scheme”. Members of DC schemes would be entitled to transfer their pot at retirement into a retirement CDC scheme to obtain a retirement income.
The government currently anticipates that retirement CDC schemes would only be accessible by members where the trustees of their DC scheme have decided that a retirement CDC scheme would be an appropriate retirement option for their members. Individual members would not therefore be able to access a CDC scheme if their DC scheme did not select it as a retirement option. However, the government will continue to review the retirement CDC landscape to evaluate whether a retail market for individual members becomes a more appropriate option in future. The consultation closes on 4 December 2025.
Action Trustees and employers of DC schemes should monitor the outcome of the consultation.
UK investment – launch of Sterling 20 group
The government has announced the launch of the Sterling 20 group, a new investor-led partnership between 20 of the UK’s largest pension funds and insurers, which will invest in key UK infrastructure and fast growing businesses in key modern industrial strategy sectors in the UK such as AI and fintech. The group comprises the 17 signatories to the Mansion House Accord, plus the Pension Protection Fund, Pension Insurance Corporation and Rothesay.
Action No action required.
Mayer Brown news
Recent work
Tom MacAulay, Henry Corrigan, Andrew Block and Josephine Wong advised the trustees of the Ford Hourly Paid Contributory Pension Fund and the Ford Salaried Contributory Pension Fund on two buy-ins totaling £4.6 billion, in a combined transaction. In total, the benefits of over 35,000 retirees were secured. This is the largest pension risk transfer deal announced in the UK in 2025.
Events
- Duncan Watson spoke at the Defined Contribution Real Estate Council, Inc. (DCREC) Thought Leadership Conference in Chicago. He discussed the UK government’s initiatives to stimulate the UK economy and improve DC returns by investing in private assets, particularly focussing on the use of the Long Term Asset Fund (LTAF) structure which has emerged as the leading fund vehicle for facilitating these investments. Duncan also attended Mayer Brown’s Funds & Investment Management practice’s global retreat in New York.
- Mayer Brown will be attending the Women in Pensions Awards on 12 November 2025 – with our Knowledge Counsel, Katherine Carter, having been shortlisted in the "Innovator of the Year" category for her work on our General Code Compliance Tracker.
- Mayer Brown is hosting the PMI’s Pensions Investment Forum on 27 November 2025. Henry Corrigan will be presenting a session on fiduciary duty and the future of pensions investment. Further information on the Forum is available here.
Insights
- Insights: Employment | Benefits | Mobility – Q3 2025 | Insights | Mayer Brown
- Pension Scheme Trustee Directors – Identity Verification Requirements | Insights | Mayer Brown
- Capita Cyber Security Breach – £14 Million Fine Issued | Insights | Mayer Brown
All our Insights are available here.
