Although it felt like the end of a long road, Royal Assent was of course not the final destination for the Pension Schemes Act 2026 (the ‘Act’). The Pensions Minister has now published an updated roadmap setting out detail on the timing of the various strands of reform that the Act will bring to the pensions industry. In this Legal Update we summarise the Government’s updated plans.
The comprehensive plans for papers, consultations, guidance and regulations can be found in the roadmap. The key changes from previous expectations are the delay in introducing Guided Retirement default solutions so that it works alongside the introduction of retirement CDC and the phasing in of the new Value for Money requirements.
We have summarised the key elements of the roadmap below:
- Retirement Collective Defined Contribution (CDC)
- October-December 2027: regulations laid on retirement CDC
- October-December 2028: legislation and TPR code for retirement CDC come into force and applications for authorisation begin
- April-June 2029: estimated date for first retirement CDC schemes to be authorised
- July-September 2030: schemes choosing retirement CDC as default option to be compliant with guided retirement
- Value for Money (VfM)
- July-September 2026: DWP consultation has been published, with draft Regulations and draft FCA Rules. The closing date is 1 September 2026. TPR is also due to publish guidance
- January 2027: Regulations and FCA Rules come into force
- March 2028: TPR Code in force, and schemes to submit first data to the FCA/TPR
- March 2028: to help FCA-regulated schemes comply with requirements to transfer members if they fail to meet VfM standards, a contractual override will be implemented
- October 2028: first assessment reports and data to be published by larger schemes (expected to cover those with over 50,000 members) and master trusts, with smaller schemes only needing to submit data without assessment
- October-December 2029: second year assessment reports and data to be published, including smaller schemes
- Other points of interest to DC schemes:
- Fiduciary investment duty: while the House of Lords defeated the Government’s attempt to include this in the Act, the DWP will push ahead with drafting guidance to be published in early 2027. DWP says this will give “trustees confidence to act in the best interests of members, including over the long term.”
- Guided retirement: after various consultations, regulations and guidance from DWP, TPR, the FCA and the FRC (on standards for illustrating decumulation options), guided retirement will come into force for master trusts and FCA-regulated schemes in the middle of 2029 and for other trust-based schemes from 2030. The DWP published further information on Guided Retirement Guiding Principles alongside the roadmap.
- Small pots: consultations will come in two tranches, starting with the digital infrastructure and establishing default consolidator schemes to receive transfers, followed by a second tranche on the roles and responsibilities of ceding schemes. Consolidation is due to begin around April 2030.
- Scale and consolidation: master trusts and group personal pensions used for automatic enrolment will need to prepare for at least one default arrangement to be approved during 2029, with over £25bn in assets under management (AUM) in it by 2030. There will also be a ‘transition pathway’ for smaller schemes, who must have at least £10bn AUM by 2030, growing to £25bn by 2035. The ‘innovation pathway’ for new market entrants will remain open beyond that date. DWP has issued a Discussion paper on key elements of the Scale Policy.
- Other points of interest to DB schemes:
- Surplus: around April 2027, regulations from DWP (on return of surplus to the employer) and HMRC (on the new authorised surplus lump sum to members) will come into force, as well as guidance from TPR and the FRC on payment of surplus.
- Superfunds: DWP regulations and a TPR Code will come into force by October 2028.
