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Welcome to your weekly update from the A&O Shearman Pensions team, covering all the latest legal and regulatory developments in the world of workplace pensions.
Summary
Government to legislate for statutory guidance on trustees' fiduciary duties; consultation to follow.
Amendments to the Pension Schemes Bill accelerate remedies for invalid amendments and introduce other changes.
National Insurance Bill will require NICs for employer pension contributions via salary sacrifice exceeding GBP2,000 a year, from April 6, 2029.
Finance (No.2) Bill updates inheritance tax treatment of unused pensions and expands registration for collective money purchase schemes.
Plus: PASA guidance on the impact of the Data (Use and Access) Act; new TPR regulatory intervention report and TPR campaign promoting pledge to combat pension scams.
Update on Pension Schemes Bill and future guidance on fiduciary duties
During Parliamentary debate on the Pension Schemes Bill, the Pensions Minister announced that he intends to bring forward legislation that will allow the government to develop statutory guidance for trustees on their fiduciary duties. The guidance is intended to support trustees in considering factors including systemic risks (such as climate change) and members' standards of living. This will be the subject of consultation.
The debate also covered a range of amendments being proposed to the Bill, including bringing forward the timing of powers to remedy invalid amendments following the Virgin Mediadecision, so that they come into force at Royal Assent (rather than two months later). They also introduce indexation increases to Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS) compensation in respect of pre-97 pensions, as announced in the Budget, and abolish the PPF administration levy.
Read the debate (announcement on fiduciary duties at column 1043).
New National Insurance Bill following budget announcement on salary sacrifice
The National Insurance Contributions (Employer Pensions Contributions) Bill has been published, enabling the change announced in the Budget, that National Insurance contributions (NICs) will be payable where employer pension contributions are made via salary sacrifice arrangements that exceed GBP2,000 a year. Further details will be set out in regulations and the changes are expected to take effect from April 6, 2029.
Finance (No.2) Bill published
The Finance (No.2) Bill has been published. The Bill includes provisions on bringing unused pensions into scope for inheritance tax from April 6, 2027, which have been updated since the previously published version. One of the notable changes is that personal representatives of deceased members will be able to request that the pension scheme administrator withholds paying 50% of beneficiaries' entitlement where certain conditions are met, as announced in the Budget. The bill also includes provisions around collective money purchase schemes (also known as collective defined contribution/CDC) being able to become registered occupational pension schemes with HMRC for tax purposes (also announced in the Budget).
PASA guidance on Data (Use and Access) Act
The Pensions Administration Standards Association (PASA) has published a paper setting out areas in which the Data (Use and Access) Act 2025 affects pension scheme administration:
How will pension scheme administration be affected by the Data (Use and Access) Act?
- Automated decision making: the removal of some previous restrictions may facilitate improved automation.
- Elevation of the Digital Verification Services (DVS) to a statutory footing: schemes can use providers certified under the mandated UK Digital Identity and Attributes Trust Framework (DIATF) to deliver high assurance identity matching.
- Recognised legitimate interests (RLIs) as a new basis for processing personal data: one of the RLIs is safeguarding vulnerable individuals, which could be used by schemes to make timely, proactive interventions where a member faces financial vulnerability, cognitive decline or exploitation.
- Helpful changes to subject access request requirements: schemes will benefit from the ability to pause the response timeline where clarification or further information are needed and from confirmation that searches only need to be "reasonable and proportionate".
- New requirements for data-related complaints: data protection complaints may need to be handled separately from other scheme member issues and escalations will go to the ICO rather than the Pensions Ombudsman. This could add complexity for schemes.
TPR regulatory intervention report
The Pensions Regulator (TPR) has published a regulatory intervention report outlining action taken in relation to the Northern Foods Pension Scheme (NFPS). The action arose from the sale of multiple businesses from the employer group; TPR was concerned about the weakening of the scheme's direct covenant and that the scheme had not been treated fairly compared with other stakeholders. TPR issued a warning notice, seeking formal financial support from the group's holding company, Boparan Holdings Limited (BHL) and an associated entity, plus several subsidiaries of both companies. A joint support package was agreed:
- The scheme's statutory employer has been replaced by a stronger entity.
- Around GBP300 million in contributions will be paid by June 2034, aiming to get NFPS to full funding on a "low dependency" funding basis.
- A BHL guarantee has been extended to cover all ongoing liabilities to NFPS, including the scheme's full section 75 debt if that became due during the period.
- All material sponsor subsidiaries have also provided guarantees.
- The scheme will receive 100% of disposal proceeds from one remaining business and 30% from the other, if sold.
- The associated entity has provided a significant unsecured guarantee for contributions.
TPR notes that its actions "reflect its commitment to ensuring that defined benefit pension schemes are treated fairly during corporate refinancing or restructuring activities" and show that TPR "may pursue financial support from entities outside the employer's immediate group to protect members."
Read the regulatory intervention report.
TPR encourages adoption of scam pledge
TPR has launched a new campaign promoting its pledge to combat pension scams. TPR is urging schemes to adopt the pledge and asking those who have signed up to go one step further and self-certify that they are turning their commitment into action. The pledge now uses clearer self-certification wording and directs all reports to Action Fraud. TPR will work with the industry next year to further improve the pledge.
Read about the pledge campaign.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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