Issues Affecting All Schemes
Inheritance Tax Changes: Provision of Information Requirements
HM Revenue & Customs (HMRC) has published draft regulations for consultation setting out the new provision of information requirements that will apply in relation to the changes to the inheritance tax (IHT) treatment of death benefits. Under the draft regulations, schemes will be required to provide information to both personal representatives (PRs) and beneficiaries. Generally speaking, where the information that must be provided depends on the trustees having decided who will receive the death benefits, the information does not have to be provided until that decision has been made.
The draft regulations also require:
- Payment of a death in service benefit to be reported to HMRC; and
- All events that must be reported to HMRC (whether in relation to payment of death benefits or otherwise) to be reported electronically.
The consultation closes on 11 June 2026 and the government plans to publish the final regulations later this year. For more information, please see our Legal Update, New Inheritance Tax Rules for Pension Death Benefits: What Trustees Need to Know About Information-Sharing.
HMRC has also published a technical note explaining how the legislation will operate in practice for PRs, scheme administrators, and beneficiaries.
Action
Trustees and administrators should factor the proposed requirements into their preparations for the introduction of the IHT changes.
Artificial Intelligence: Pensions Regulator Plan
The Pensions Regulator (TPR) has published a plan setting out initial expectations for how trustees should govern the use of AI. More detail on good practice will be set out in guidance later this year, but in the meantime TPR expects schemes to:
- Establish clear governance and accountability for AI use, including assuring themselves that administrators, service providers, and advisers have similarly robust arrangements;
- Carry out rigorous testing, assurance, and ongoing monitoring of AI systems;
- Identify and evaluate risks, with appropriate controls being put in place, reviewed regularly, and adapted as necessary;
- Prevent members being scammed by being aware of AI-driven fraud methods and responding effectively to the evolving threat;
- Have a clear data strategy, ensure scheme and member data is of high quality, and comply with data protection legislation – including as it relates to automated decision-making; and
- Seek appropriate professional advice when considering or implementing innovations.
The plan also sets out four areas of focus for TPR to enable the safe adoption of AI:
- Ensuring all schemes are well-run and well-governed;
- Putting the data building blocks in place for effective AI adoption;
- Supporting and fostering responsible innovation; and
- Harnessing AI to become a more efficient and effective regulator.
TPR will report annually on progress and will continue to evolve the plan as the pensions landscape changes.
Action
Trustees should review the plan and, in collaboration with their administrators, consider what – if any – steps should be taken in relation to their scheme’s governance and administration processes.
Pensions Commission: Interim Report
The Pensions Commission has published its interim report. Its key conclusions are:
- An ageing population requires a renewed and sustainable settlement for retirement adequacy.
- Pension policy should enable everyone to achieve a decent standard of living in retirement with the non-means-tested State Pension as a foundation.
- Automatic enrolment has increased workplace pension saving but not enough for low and middle earners.
- Many people are not saving at all, and the length of working lives is also a driver of adequacy.
- Decumulation choices decisively impact people’s retirements and stronger guardrails are needed.
- The existing settlement provides firm foundations but needs strengthening for the long term.
The Commission’s final report with its recommendations will be published in early 2027.
Action
No action required.
Pensions Dashboards: Regulatory Initiative
TPR has launched a regulatory initiative targeting DB and hybrid schemes to assess how they are preparing their data ahead of dashboards connection. The initiative will target 240 private sector DB and hybrid schemes, assessing how they are preparing to meet their dashboard duties, with a particular focus on the readiness and accuracy of value data. Insights from this work will help inform discussions on the timing of the launch of the MoneyHelper dashboard.
Action
No action required.
TPR: Corporate Strategy
TPR is consulting on its next five-year corporate strategy. Its previous corporate strategy focussed on the pension saver. Its new strategy will build on that and take a system-wide view, looking beyond the accumulation of savings to retirement outcomes that people experience throughout retirement – whether as DB or DC members. This focus will guide how TPR regulates and where it focuses its efforts. The strategy is designed around three desired member outcomes and three desired market outcomes:
- Member outcomes: Secure savings, better value, and fair pensions.
- Market outcomes: Well-run schemes, a sustainable and resilient market, and a seamless and integrated system.
The consultation closes on 8 June 2026.
Action
No action required.
Issues Affecting DB Schemes
TPR: 2026 Annual Funding Statement
TPR has published its 2026 annual funding statement. Its key messages include:
- Most schemes continue to see positive funding levels.
- 90% of schemes are in surplus on a technical provisions basis;
- 80% of schemes are in surplus on a TPR-derived low dependency basis; and
- 60% of schemes are in surplus on a buy-out basis.
- In line with last year, TPR expects most schemes to be shifting their focus from deficit recovery to endgame planning.
- TPR will publish a statement providing early views on the issues trustees should consider around surplus release. Later this year, it will consult on more detailed surplus guidance to sit alongside the new rules on surplus release when they come into force (expected to be in 2027).
- Around 80% of schemes should be able to meet the Fast Track parameters.
For more information, please see our Legal Update, DB Pension Scheme Funding: What the Pensions Regulator’s 2026 Funding Statement Means for You.
Action
Trustees and employers of all DB schemes should review the statement and those with a valuation with an effective date between 22 September 2025 and 21 September 2026 should factor the statement into their valuation discussions.
Virgin Media: Actuarial Guidance on Legislative Remedy
The Financial Reporting Council has issued its finalised guidance for actuaries on providing the retrospective confirmation to validate historic scheme amendments that is required under the Virgin Media legislative remedy. Minor amendments to wording and references have been made to ensure clarity and alignment with the Pension Schemes Act 2026.
Action
No action required.
Ill-Health Early Retirement: Reassessment of Eligibility
The Pensions Ombudsman (TPO) has upheld a complaint regarding a scheme’s refusal to reassess a member’s eligibility for more favourable ill-health early retirement (IHER) benefits. Although the member had made her request outside the three-year time limit for reassessment applications, there was a discretion in the scheme rules to extend the time limit. TPO decided that the scheme had failed to consider whether to exercise that discretion. He directed the scheme to properly consider whether to exercise that discretion and to pay the member £500 for distress and inconvenience, regardless of the outcome of that consideration.
Action
No action required, but where scheme rules give trustees a discretion to reconsider a late application for IHER benefits, trustees should ensure they consider whether to exercise that discretion.
Issues Affecting DC Schemes
Benefits of Scale: TPR Review
TPR has published a review of the evidence on the emerging benefits of scale arising from the consolidation of small DC schemes into master trusts. The review concludes that, while there is some evidence emerging of economies of scale benefits, this is not unequivocal or guaranteed. The market must therefore remain alert and responsive to risks and opportunities. It will take time for UK pensions to build the size and the systems needed to take full advantage of the opportunities of scale.
Action
No action required.
Mayer Brown News
Recent Work
Andrew Block and Gareth Davies advised specialist retail and consumer investment boutique, Modella Capital, on the pensions aspects of its acquisition of Flying Tiger Copenhagen, the renowned Danish design-led retailer of creative and affordable Scandinavian-style homeware and lifestyle products, operating more than 900 stores across over 40 countries.
Events
On 13 May 2026, Mayer Brown hosted the Pensions Management Institute’s Trustee Workbench. The Workbench is designed exclusively for pension scheme trustees and offers a series of focused training sessions on the topics that matter most to their role. Beverly Cox and Gareth Davies presented a session on protecting member outcomes in the current regulatory environment. The event was extremely well received by attendees.
Insights
- DB Pension Scheme Funding: What the Pensions Regulator’s 2026 Funding Statement Means for You
- New Inheritance Tax Rules for Pension Death Benefits: What Trustees Need to Know About Information-Sharing
View all of our Insights.
