Issues Affecting All Schemes
Corporate Trustees: Identity Verification Requirements
The UK Government has announced that identity verification of individuals filing documents at Companies House will not now be introduced before November 2026. The requirement was originally intended to be introduced this spring. The requirement for identity verification of directors of UK companies, including directors of corporate trustees, came into force on 18 November 2025.
Action
Corporate trustees should monitor any further announcements on when identity verification for individuals filing documents at Companies House will come into force.
Sustainability: Proposed New Reporting Requirements
The UK Government has announced that it is analysing responses to its June 2025 consultation on draft UK sustainability reporting standards and is aiming to publish finalised versions of the standards for voluntary use in early 2026. The UK Government and the Financial Conduct Authority (FCA) will consider whether to introduce requirements for certain UK entities to report against these standards. No specific update is provided in relation to pension schemes.
Action
Trustees should monitor any further announcements on the introduction of sustainability reporting requirements for pension schemes.
International Data Transfers: Updated Guidance
The Information Commissioner's Office has published updated guidance on international data transfers. The updated guidance sets out a "three-step test" for organisations to identify if they're making restricted transfers, and new content has been added on roles and responsibilities. In addition, the guidance includes a brief guide, quick reference FAQs, and a glossary.
Action
No action required, but trustees and administrators may find the guidance helpful when considering international transfers of personal data.
Pensions Dashboards: Data Preparation And Reporting
The Pensions Dashboards Programme (PDP) has published a blog post and FAQs on preparing data for pensions dashboards. These cover:
- The importance of data preparation;
- The data standards and responsibility for adhering to them;
- Find data and view data, and the 3/10-day rule for returning view data;
- Data matching, responsibility for data matching criteria, and current data matching testing;
- The data attributes that are verified by the identity service; and
- Available guidance and resources.
The PDP is also consulting on a revised version of the dashboards reporting standards. The updated standards change how data is to be reported to the Money and Pensions Service, with daily submission replacing ad hoc reporting on request from 30 November 2026. No changes are being made to what data must be generated, recorded and reported. The current approved reporting standards will continue to be legally binding until a new version is formally approved. The consultation closes on 25 March 2026. The PDP has published a blog post summarising the consultation.
Action
No action required, but trustees and administrators of schemes that are subject to the dashboards requirements may find the guidance helpful.
Digital Transformation: Guidance On Planning
The Pensions Administration Standards Association (PASA) has published the second in its three-part series of guidance on delivering effective digital transformation. The guidance:
- Provides actionable planning strategies for schemes of all sizes and levels of digital maturity;
- Introduces the BRIDGE(PS) framework, a practical transformation planning model designed to help schemes move from vision to implementation in a structured and user-centric way;
- Explores the importance of setting future-ready technology foundations; and
- Highlights the need for scalable infrastructure, consistent member experiences, and robust integration approaches.
Action
No action required.
Winding-up Lump Sums: Payment Following Death Of A Member
The Pensions Ombudsman (TPO) has rejected a complaint about recovery of a winding-up lump sum following a member's death. In February 2021, the member accepted the offer of a winding-up lump sum of just under £12,000 from the scheme. In early March 2021, the scheme wrote to the member, confirming that his last pension instalment would be paid in April 2021, followed by the lump sum in May 2021. The member died in late March 2021, but the scheme was not notified. The scheme paid the final pension instalment payment and the lump sum in April and May 2021.
Shortly afterwards, the scheme became aware of the member's death and wrote to his son in June 2021 to request repayment of the lump sum on the basis that the member's entitlement to it had been extinguished by his death. The member's son complained, arguing that the scheme had made a contractual agreement with his father to pay the lump sum, and it should not therefore be recovered.
TPO decided that current tax legislation did not permit the scheme to pay a winding-up lump sum after the member's death. It was irrelevant that the member was not aware of or informed of this when accepting the lump sum offer. To the extent that any agreement existed between the scheme and the member, it was for the payment of a winding-up lump sum, and that payment was not possible following the member's death. Nor did the member's estate have a valid defence to recovery of the lump sum. While the lump sum had been spent on funeral and other expenses by the time repayment was requested, there was no financial detriment to the estate. Probate had not been granted and TPO would not therefore have expected the executors to have distributed the estate to the beneficiaries at the point repayment was requested. The estate had a net value of just under £228,000, which was more than sufficient to cover the funeral and other expenses and repay the lump sum. Probate was granted in late July 2021 and, knowing that there was an issue around whether the lump sum needed to be repaid, a reasonable course of action by the executors would have been to retain the amount of the lump sum in the estate until the matter was resolved.
Action
No action required.
Issues Affecting DB Schemes
Bulk Purchase Annuities: 2026 Regulatory Priorities
The Prudential Regulation Authority (PRA) has set out its supervision priorities for 2026 for the insurance sector. Key points from a bulk purchase annuity (BPA) perspective include:
- The PRA remains concerned that competitive pressures in the BPA market create incentives for firms to weaken pricing discipline or their risk management standards. Insurers should ensure their internal risk management frameworks and controls are sufficiently robust to assess and manage risks that they take on, including as pressures increase on pricing and as more complex transaction features are considered. In 2026, the PRA will revisit how insurers have responded to its letter on solvency-triggered termination rights, to ensure the potential risks of those contract features are recognised and being managed appropriately.
- The PRA continues to see growing use of funded reinsurance (FundedRe). While FundedRe can provide access to additional capital and asset classes, it also introduces material risks that must be carefully managed. Since September 2025, the PRA has engaged with insurers to develop a common understanding of these issues and to allow it to consider whether further policy action is needed. This engagement has confirmed the need for policy action and the PRA is reflecting on the views provided by insurers to help formulate its policy proposals. It expects to provide a further update in Q2 2026.
Action
No action required, but trustees of schemes considering a buy-in or buy-out should be aware that the PRA's announcement could impact insurer capacity in the BPA market.
Virgin Media: Actuarial Guidance On Legislative Fix
The Financial Reporting Council has issued guidance for scheme actuaries on providing the retrospective confirmation to validate historic scheme amendments that is required under the Virgin Media legislative "fix." It provides practical, non-prescriptive guidance for actuaries, including how key terms in the Pension Schemes Bill should be interpreted and examples illustrating how to apply a proportionate approach in collecting information and forming judgements when historic records are incomplete. To give actuaries sufficient time to prepare, the guidance has been published ahead of Royal Assent of the Bill. The guidance may therefore be updated if changes are made to the legislative fix as the Bill progresses through Parliament.
Action
No action required.
Buy-ins And Superfund Transfers: Role Of Administration
PASA has published guidance on the role of administration before, during and after a buy-in or superfund transfer. The guidance focuses on the areas where schemes most often encounter friction, including data integrity, rule alignment, member communication, deferred member complexity, risk management, and resourcing. It provides practical actions to help schemes plan early, avoid delays and maintain confidence throughout the de-risking journey.
Action
No action required, but trustees and administrators of schemes that are considering a buy-in or superfund transfer may find the guidance helpful.
Validity Of Amendments: Settlement And Rectification
The High Court has approved a settlement of various issues concerning the validity of amendments made to a multi-employer DB scheme. The court also granted rectification of various documents relating to the scheme. Between 1993 and 2010, when the scheme closed to future accrual, multiple deeds and other documents were executed. Most (but not all) sought to reduce the benefits payable by the scheme. However, three issues were subsequently identified that affected many of the amendments:
- Some documents appeared not to have been validly executed;
- Some amendments may have been invalid because the required actuarial confirmation had not been obtained; and
- Some amendments may not have had the effect intended, such as increasing rather than decreasing benefits.
The scheme had always been administered on the basis that the amendments had been validly made and had the intended effect.
A settlement of the execution and actuarial confirmation issues was agreed between the employer, trustee and representative beneficiary under which the potentially invalid amendments would be considered valid and additional benefits would be payable to members. Those additional benefits were calculated by identifying 13 specific junctures at which the execution and actuarial confirmation issues might mean that members had a higher entitlement to benefits than they had obtained under the scheme's administrative practices to date. These junctures resulted in 34 different scenarios (taking into account the effect of early junctures on later junctures). The additional benefits were calculated by estimating the overall probability of each of those scenarios occurring, with the sum of the 34 probabilities adding up to 1 (reflecting the fact that between them, the scenarios represented all the realistically possible outcomes on the matters in dispute). The court concluded that the parties had adopted a rigorous process that had produced an eminently reasonable outcome that fairly addressed the interests of everyone affected by the settlement.
The parties also sought rectification of various documents. The court concluded that the trustee's case for rectification was supported by the evidence and the application was not opposed by the representative beneficiary. There was, therefore, no good reason for the court to withhold rectification.
Action
No action required.
Issues Affecting DC Schemes
Value For Money: Further Consultation
The FCA and the Pensions Regulator (TPR) are consulting jointly on the new value for money (VFM) framework for DC schemes. The consultation is intended to serve as:
- The FCA's response to its 2024 consultation on the proposed detailed rules and guidance for contract-based schemes (to be set out in the FCA Handbook);
- A further consultation on amendments to those rules and guidance in light of the feedback to the 2024 consultation; and
- A discussion paper, inviting input which can be used in developing the regulations that will set out the VFM requirements for trust-based schemes.
The key changes that are proposed include:
- Introduction of forward-looking metrics to be considered alongside backward-looking metrics in assessments, and fewer cost and backward-looking investment performance metrics;
- Comparisons of value against a commercial market comparator group rather than three other schemes. This would be enabled by a central VFM database into which all scheme VFM data would be entered; and
- A four-point rather than three-point VFM rating system.
The consultation closes on 8 March and the DWP, the FCA and TPR currently expect the first assessments under the new framework to be required in 2028. For more information on the consultation, please see our Legal Update.
TPR has published an overview for trustees of the consultation and, in particular, the proposals most relevant to trust-based schemes. The overview explains how assessment and reporting would work in practice and sets out where TPR is specifically seeking trustees' views. The overview is designed to help trustees understand the proposals in the consultation and engage meaningfully with them, including those who have not engaged with the new VFM framework before. TPR has also published a blog post on the consultation.
Action
Trustees should monitor the outcome of the consultation.
Mayer Brown News
Recent Work
Tom MacAulay, Andrew Block and Henry Corrigan advised The Royal London Mutual Insurance Society Limited on the completion of a £213 million bulk purchase annuity transaction with the Trustee of the Oxford Instruments Pension Scheme. Royal London is the United Kingdom's largest mutual life, pensions and investment provider and the deal is Royal London's second largest external buy-in to date.
