Current Issues February 2025

PPF Levy for 2025/26 to be lowest ever:  The PPF had originally proposed to maintain the levy at £100m for 2025/26, which was unchanged from the previous year. However, after consulting with the government, the PPF had reduced the levy estimate to £45m. Virtually all schemes should see a reduction, which is great news for schemes and employers, who may remember huge levies in previous years. The PPF is sufficiently well resourced not to need to issue a levy, but restrictions on how it can change the levy year on year meant it was reluctant to issue no levy. The government is considering proposals to allow the lifeboat fund to make further reductions and the PPF have included a provision in its levy rules that would enable a zero levy to be applied if proposals are sufficiently advanced during 2025/26.

Scheme Surplus – Government proposals:   On 28 January 2025, the Government announced plans to legislate on surplus funds in defined benefit (DB) pension schemes. The proposal aims to allow surplus funds to be returned to employers or used to enhance member benefits. The Government estimates that 75% of DB schemes are in surplus, collectively worth £160 billion, but existing restrictions limit access to these funds. The initiative aligns with the Government’s growth agenda. Current regulations permit surplus withdrawals only if a resolution was passed before 6 April 2016 under section 251 of the Pensions Act 2004. The Government intends to remove this restriction, enabling all schemes to access surplus if trustees and employers agree.

The Pensions Regulator has endorsed the initiative but emphasises that member security remains its priority. The Government’s estimated £160 billion surplus is based on a low dependency measure, reducing to approximately £100 billion on a buyout basis. The Government’s detailed policy response is expected in Spring 2025.

Pension Scams – TPR updates warning leaflet:  TPR has updated its pension scams leaflet with branding of the Pension Scams Action Group. The rebranded leaflet can be found here:  Warn members about pension scams | The Pensions Regulator  Atkin Pensions will be issuing the updated leaflet in correspondence with members from now on.

Scheme Returns – More questions added in 2025:  TPR will issue scheme return notices for (DB) and hybrid schemes in February 2025. Returns must be submitted via TPR’s Exchange system by 31 March 2025. Trustees must confirm whether common or scheme-specific data has been measured in the last 12 months, as well as when it was last reviewed. Schemes that have not reviewed data recently, or at all, may be contacted by TPR. The “Investment services” section now includes questions on investment consultancy objectives, requiring trustees to confirm if these have been set, reviewed, and assessed against performance.

The new questions can be reviewed here: DB and mixed benefit scheme return | The Pensions Regulator  We would encourage trustees to review these and contact us if they wish to commission a review of scheme data.

Pensions Minister – New year, new minister:  Following Tulip Siddiq’s resignation, former Pensions Minister, Emma Reynolds, has been made the Economic Secretary to the Treasury. Torsten Bell, the MP for Swansea West, has been appointed as the Pensions Minister.

Atkin complete buy in for Wednesbury pension scheme: Wednesbury Pension Scheme has completed a £43m buy-in with Just Group in respect of its 384 members. Click here to read the case study.