Pensions law update: May 2026

Pensions ping-pong – the outcome

As we’ve outlined previously, there were a large number of non-Government amendments tabled for inclusion in the Pension Schemes Act during its passage through Parliament.

On 27 April, as the then Bill neared the end of its legislative journey, we published this summary setting out which of the various non-Government amendments, agreed by the House of Lords, had been accepted by the Commons and would be included in the final legislation.

As we highlighted in the article, by 27 April, the “asset allocation” reserve power, which would allow the Government to mandate how the assets in default funds in master trusts and GPPs used for auto-enrolment are invested, was the only outstanding point of disagreement between the Houses.

The investment mandation power, as it’s often referred to, was one of the cornerstones of the Government’s consolidation agenda that underpins so much of the Act but it has also proved to be by far the most controversial measure.

Following several rounds of amendments, the version of the power that has now found its way onto the statute books has been significantly watered down in a number of key areas including most notably:

• the scope of the power is now limited – regulations cannot require more than 10% of default fund assets to be invested in qualifying assets, and no more than 5% in UK‑specific qualifying assets (mirroring the voluntary commitments in the Mansion House Accord). Its use is also restricted to requiring investment in a specified list of assets set out in the Act, which must be defined in regulations.
  
• the power is strictly time limited – it cannot be used before 1 January 2028. It will also sunset off the statute books in 2032 if unused (and in 2035 regardless, including any regulations made under it).
  
• the threshold for schemes to meet the test for the “savers interest” exemption has been significantly lowered – trustees or scheme managers now need only show that requiring the default fund to be invested in the way prescribed would not be in members’ best interests.
  
• requirements for the report to be produced by TPR and the FCA before the asset allocation power can be used have been strengthened, including a requirement for consideration of the pipeline of available assets.

Other key developments

29 April 2026 was a landmark day for the pensions regulatory landscape. Alongside the passing of the Pension Schemes Act, there were two further noteworthy legislative developments:

• the National Insurance Contributions (Employer Pension Contributions) Act 2026 was also passed. This is the primary legislation which gives the Government power to bring in the changes to salary sacrifice arrangements via secondary legislation. The Government plans to cap the amount of pension contributions that can be paid via salary sacrifice arrangements to £2,000 from April 2029.
  
• TPR’s updated CDC Code (now expanded to cover multi-employer CDC arrangements) was also laid: New TPR code for CDC schemes. TPR’s press release says the Code is expected to come into force in mid-October, and that “multi-employer schemes could be operating in early 2027”.

Cyber security and data protection

New data subject complaints regime – what pension scheme trustees need to know

The Data (Use and Access) Act 2025 (DUAA) introduces a new statutory duty for all data controllers, including pension scheme trustees, to maintain and operate a formal process for handling data protection complaints from 19 June 2026.

Samantha Howell summarises the actions trustees need to take now to ensure compliance with the new duties.

Cyber security FAQs

Following on from our webinar mini-series on building cyber resilience and developing business continuity for pension schemes, and in response to questions raised by participants, we have produced an FAQs document. The document includes practical suggestions from our speakers and we hope you find it helpful.