TPR – Annual Funding Statement: The Pensions Regulator has published its 2025 Annual Funding Statement, primarily aimed at trustees and sponsors of DB schemes with valuation dates between 22 September 2024 and 21 September 2025 being the first to fall under the new DB funding regime. The statement is also relevant to all DB schemes, offering broader insights into current risks, covenant assessment, and supportable risk. The Regulator highlights increased global uncertainty due to geopolitical and trade tensions, warning that investment volatility may persist. Trustees must understand how such risks affect both investment strategy and employer covenant. Under the new regime, valuations must integrate actuarial, investment, and covenant considerations, requiring collaborative work with advisers. A proportionate covenant assessment may be appropriate where reliance on the employer is low. Trustees should focus on key covenant risks. The Regulator also acknowledges growing interest in DB scheme surpluses and anticipates forthcoming legislation on surplus use. The statement can be found here: TPR Annual Funding Statement
DWP response to Work & Pensions Committee report: The Department for Work and Pensions has responded to the Work and Pensions Committee’s report on DB pension schemes. The government said it would act on recommendations around the Pension Protection Fund (PPF) levy and consider allowing the PPF more flexibility to reduce the levy when appropriate. It acknowledged the need to balance member protection, levy payer fairness, and public finances. Consultations will be launched later this year on trustee accreditation and governance improvements, with further detail on surplus release expected this spring as part of the government’s response to the ‘Options for DB Schemes’ consultation.
Superfunds – TPR Blogs: In a blog published on 23 April, The Pensions Regulator (TPR) reflected on the first three completed superfund transfers and noted that around 40% of DB schemes may meet the first two of the Gateway Tests by the end of 2024. The blog clarifies aspects of the transfer process, including that actuarial estimates can meet Gateway test 1 (buyout quotation) and minimal due diligence on the recipient fund is acceptable for Gateway test 2. TPR also confirmed it will publish DB Endgame Options guidance later this year, alongside new legislation in the Pension Schemes Bill. The blog can be found here: How to make transferring to a superfund run as smoothly as possible | The Pensions Regulator Blog
Buy-in/Buy-out – updated guidance on data readiness: The Pensions Administration Standards Association (PASA) has released updated guidance on data readiness for pension scheme buy-ins and buyouts. The revised document emphasizes the importance of complete, accurate, and current data to ensure smooth transactions, enhance insurer engagement, and improve pricing and benefit delivery. Read the full press release here: PASA Press Release.
Pension Scams – AI being used to protect savers: The Pensions Regulator and the Pension Scams Action Group have introduced an AI-powered tool to identify and dismantle fraudulent pension websites, enhancing protection for savers. This initiative has led to the review of 830 sites, the removal of 29 high-risk ones, and 94 referrals to partner agencies. Additionally, a new Fraud and Cyber Crime Reporting and Analytics Service will replace Action Fraud later this year, aiming to improve scam detection and response.
Auto-enrolment – Small pots consolidator: The government has confirmed plans to introduce a small pots consolidator scheme, starting with pension pots worth £1,000 or less. Announced following the April 2025 Small Pots Delivery Group Report, the scheme aims to tackle the growing issue of lost, small pension pots. The upcoming Pension Schemes Bill will establish the model, with eligibility criteria, member opt-outs, and protections against flat fees. Around 13 million pots could be covered initially.
