After a quiet couple of weeks, we had a busy pensions day on 29 May with the publication of three consultation responses setting out the Government’s plans for surplus extraction, defined contribution (DC) consolidation and scale and the Local Government Pension Scheme (LGPS). The Pensions Regulator (TPR) also confirmed the launch of its new defined benefit (DB) funding regime digital valuation submission service and, earlier in the month, provided its thoughts on the forthcoming DC decumulation duty. We cover all these developments as well as reporting on the Mansion House Accord initiative and pensions dashboards.
Government publishes three consultation responses confirming its plans to legislate for surplus extraction flexibility, require multi-employer DC default £25bn ‘megafunds’ and LGPS changes
On 29 May 2025, the Government published three consultation responses confirming:
- it will include provisions in the forthcoming Pension Schemes Bill to allow trustees to modify scheme rules to extract surplus from an ongoing scheme, require (with certain exemptions) multi-employer DC arrangements used for auto-enrolment to have at least one ‘main scale default arrangement’ with a minimum of £25bn in assets under management by 2030; and that,
- it will go ahead with asset pooling, improved governance and investment changes in the Local Government Pension Scheme.
You can find more information in our in-depth insights – here and here.
Mansion House Accord – 17 DC providers pledge to invest 10% of funds in private markets by 2030
Building on the 2023 Mansion House Compact, 17 large DC pension providers have signed up to the voluntary Mansion House Accord initiative that is being jointly run by the Association of British Insurers, the Pensions and Lifetime Savings Association and the City of London Corporation. The aim is to secure “better financial outcomes for DC savers through the higher potential net returns available in private markets, as well as boosting investment in the UK” with a goal of investing at least 10% of the £252bn funds in scope in private markets by 2030, with a 5% UK allocation. For those involved in both initiatives, work completed under the Compact will contribute to achieving the Accord’s objectives.
The Pensions Regulator (TPR) round-up
Speech and press release on DC decumulation and PPI decumulation report
TPR’s 14 May 2025 press release discusses the Pension Policy Institute’s first in a series of decumulation reports (sponsored by TPR) which considers “what an assessment for Value for Money (VfM) could look like in the decumulation stage of retirement”. One of the key findings is that DC savers require more assistance, a retirement ‘sat nav’, to ensure that the way in which they take their benefits suits their needs.
“The research warns that many retiring savers take full cash withdrawals or stay in investment strategies designed for pre-retirement, not post-retirement, needs. In many cases, neither option may be the best way for them to meet their long-term retirement goals.”
TPR calls for improved transparency over post-retirement investment strategies and notes that data will be key in effective decumulation, including improved scheme data use by schemes.
Speaking at the PPI retirement income report launch “Helping people with their retirement choices” on 14 May 2025, TPR’s Interim Director of Policy and Public Affairs asks that the industry joins together to innovate in this area and “provide a suite of products and services which are suitable for different kinds of savers”. There are five key principles for good decumulation: VfM; assistance for savers when making decisions; products geared at members’ best interests; genuine choice; and personalised support.
Next steps
Trustee decumulation duty: A trustee decumulation duty (Guided Retirement) will be included in the forthcoming Pension Schemes Bill. Trustees will either have to offer an in-house service or provide this through a partner provider. Further detail should be available soon as it is expected that the Bill will be published before Parliament’s summer recess.
TPR’s new innovation design service: This was launched on 19 May 2025 to “help support innovation in savers’ interests and potentially boost economic growth”, with a focus on administration and member experience especially in decumulation, and investment and new scheme models. The first event is on 4 June 2025 and those interested can register interest by emailing innovation@tpr.gov.uk.
New funding regime: TPR digital submission service launches and TPR issues full response to its statement of strategy consultation
The revised DB funding and investment regime applies to valuations with effective dates on and after 22 September 2024. On 28 May 2025, TPR published its full response to its consultation on the statement of strategy that sets out the trustees’ approach to funding and risk management and which needs to be submitted together with the new regime valuation documents via a new digital valuation service that went live on the same day.
TPR published an interim response to the statement of strategy consultation back in September 2024 together with four illustrative statement templates, now available on TPR’s scheme valuation webpage; two for Fast Track valuations (before or after the relevant date) and two for bespoke valuations.
The response provides fuller commentary on the consultation feedback. It also confirms that trustees must use a statement spreadsheet when producing and submitting their statement of strategy. This takes users through specific questions and which can, once completed, be printed or saved as a PDF for signing by the chair of trustees. The illustrative templates are simply just that, an illustration of what the statement will include and should not be used to complete the statement itself.
Action: Trustees should make sure they begin their preparatory work for the first valuation under the new framework in plenty of time to allow for lead-in work, additional liaison time with the sponsoring employer and completion of the relevant documents.
Dashboards: PDP progress update report
Dashboards is featuring heavily in the pensions news at the moment, not surprising given last month heralded the first connection to the dashboards ecosystem.
The Pensions Dashboards Programme’s (PDP) May 2025 progress update report explains that, of the twenty volunteers, four have connected and others required to connect have done so successfully. TPR and the Financial Conduct Authority have indicated that they will be pragmatic where schemes or providers cannot meet their staging date because of reliance on those that have not been able to connect on time.
The report also explains that consumer testing of the MoneyHelper dashboard will be in two stages; the first from summer 2025 involving moderated testing by workplace pension scheme and research panel users, and the second from autumn 2025 involving individual members through their providers or schemes.