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Pensions law update: March 2025

6 Mar 2025 7 min read

An Investor Calculating A Valuation Of Stock Market Exchange

Welcome to our March pensions law update.

After a flurry of policy related activity in early 2025, over the past weeks there’s been a momentary pause. With the Chancellor’s Spring Forecast scheduled for later this month (26 March) and other key developments, including the “Options for DB schemes” consultation response, the full response to Phase 1 of the Pensions Review and the Pension Schemes Bill, all expected “this Spring”, it’s reasonable to anticipate that this pause may well be the calm before the storm.

This month we bring you podcast episodes discussing the Regulator’s updated covenant guidance and ESG considerations for pension schemes, a review of 2024’s significant developments in pensions cyber security, top tips for navigating the regulatory regime in respect of surplus extraction, and insights on greenwashing risks in pension scheme investments.

We also round up the latest news in relation to s37 and the Virgin Media decisions, the Pensions Regulator’s changing approach and other key updates in the pensions law world over the past month.

Pensions Pod: Season 5 concludes

After a short interlude, in February the Pensions Pod returned with a timely and topical episode focusing on the Pensions Regulator’s updated covenant guidance.

With many schemes facing their first valuations under the new funding regime this year, we were delighted to welcome Chris Flood, Managing Director at Interpath to the Pod. Chris joined host Chris Brown to discuss key talking points from the new guidance including: what has changed; the concept of “look through” guarantees; and how to approach proportionality.

Listen now

In the sixth and final episode of the season, Chris Brown was joined by James Fisher from Willis Towers Watson and our own Kate Granville Smith for an ESG focused episode, looking in particular at environmental sustainability considerations for pension schemes.

Listen now

Pensions cyber security – 2024 in review

2024 was a year of significant development for pensions cyber security, with the Pensions Regulator’s updated Cyber Security Principles and new General Code requirements coming into force. We outline the key considerations for trustees, highlighting obligations and the steps trustees can take to ensure compliance.

DB surpluses – the regulatory factor

With the Chancellor’s announcement at the end of January, “unlocking” DB scheme surpluses has been a hot topic in the industry over the past month. Clive Pugh considers how those changes might interact with the Pensions Regulator’s “moral hazard” powers.

Head of Pensions and Lifetime Savings Richard Knight recently joined XPS Group for a webinar to discuss the proposed changes to the surplus regime – you can watch the recording here:

Watch the recording

PLSA’s 2025 stewardship and voting guidelines

The PLSA publishes annual stewardship and voting guidelines, designed to offer a framework for trustees looking to make voting decisions that promote responsible investments. We take a look at what’s new for 2025.

Pension scheme investments and “greenwashing” risks

Kate Granville Smith was delighted to contribute to a recent Pensions Expert article on the challenges “greenwashing” poses for pension scheme trustees.

And look out for our in-depth report on Greenwashing risks in Pensions which will appear in the April edition of this newsletter.

How should pension scheme trustees approach EDI in scheme governance?

The Pensions Regulator’s expectations on trustees’ approach to equality, diversity and inclusion issues are set out in its guidance and its General Code of Practice. Alice Honeywill considers EDI in the context of scheme governance, and looks in particular at how trustees can build an effective EDI policy.

Pensions Bites

Accounting for the Virgin Media decision: guidance from the ICAEW

Having been expected by the pensions industry for some months, on 13 February the Institute of Chartered Accountants in England and Wales (ICAEW) published its information sheet for pension scheme sponsors and their auditors on the Virgin Media Court of Appeal judgment. It sets out the issues arising as a result of the decision and helpfully summarises the three main approaches likely to be taken by pension scheme trustees in relation to addressing s37 risks.

It is really useful to see this practical guidance in terms of how s37 risks can be addressed by auditors depending on trustee and individual pension scheme position (e.g. size of scheme versus potential s37 liabilities) and likelihood of it being a significant risk for the pension scheme.

Pensions Regulator sets out its vision for 2025

In a February blog post, TPR’s Chief Executive, Nausicaa Delfas, set out the Regulator’s plans for 2025. The key change is a shift in approach to a “more prudential” style of regulation, focusing on open dialogue and engagement with stakeholders.

31 March 2025 deadlines – contingent assets and scheme returns

A reminder that the deadline for schemes wishing to certify contingent assets to the PPF for 2025/26 levy purposes is 31 March 2025.

As highlighted in our February newsletter, this year’s levy estimate has been reduced to a record low figure of £45m. The levy formula for 2025/26 also includes provision for the levy to be reduced to zero if the legal changes the PPF (and others) have been seeking are made before 31 March 2026.

31 March 2025 is also the deadline for DB and hybrid schemes to submit their scheme returns to the Pensions Regulator via the Exchange system.

Companies House changes – director ID verification

UK company law is changing and all companies (including pension scheme sponsors and trustee companies) will need to comply with the new requirements, including ID verification for directors, people with significant control and those who file on behalf of companies. Our corporate team have recently published this article, summarising the upcoming changes and highlighting timescales for implementation.

Call for evidence: AI in the financial services sector

As part of its inquiry into the use of AI in financial services, including within the pensions sector, the Government has launched a call for evidence looking at questions such as how AI is used in the FS sector and how this may change over the next decade. The deadline for submissions is 17 March 2025.

Team news

In February, Kelly Beattie was delighted to join PwC and BESTrustees to organise the inaugural round table event for the new North East Pensions Professionals network. DB funding was the discussion topic of the day and it was a great opportunity to share experiences and expertise with the local pensions community. Many thanks to PwC for hosting – it was a really successful event and hopefully will be the first of many!

If you are based in the North East (Newcastle, Sunderland, County Durham, Darlington, Cumbria or Northumberland) and interested in attending future events, please do get in touch with Kelly.