Pensions law update: May 2025

12 May 2025 7 min read

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Welcome to our May pensions law update.

There’s little doubt that things are hotting up in the world of pensions policy as we head towards the Summer and the promised Pension Schemes Bill. On 24 April, Pensions Minister Torsten Bell kicked off the policy updates with a press release on plans for automatic consolidation of small DC pots and since then the updates from both Government and the Pensions Regulator have been coming thick and fast.

In this newsletter, alongside updates on those reforms, we bring you a key update for scheme sponsors from the Pensions Regulator’s annual funding statement, a reminder of how pension contributions can be leveraged via salary sacrifice, lessons learned from the upper tribunal on how not to make unauthorised payments, an update on pensions dashboards and much more.

This month we’re also delighted to invite you to three excellent events we are hosting or participating in. Please read on for more details and for links to sign up.

Pensions Policy round-up

We’ve been promised a busy Spring and Summer on the legal front in pensions, with a number of the reforms that have been under discussion for some time due to make an appearance in the Pension Schemes Bill which we’re expecting to be published before the Summer parliamentary recess.

Small pots consolidation

In recent days updates have begun to be published – starting with an announcement from the Pensions Minister with a skeleton timeline for implementing the new automatic consolidation of small DC pots. You can read our initial impressions on the shape of the proposed consolidator here:

Collective DC – extension to multiple employer schemes

We also now have an update on the Government’s proposals for collective DC (CDC) schemes, with regulations to extend the regime to allow for multiple employer CDC schemes promised for the Autumn. The DWP press release notes that the Pensions Minister is also still keen to deliver decumulation only CDC schemes.

PPF as public sector consolidator – still on the cards?

The response to the DB options consultation (promised this Spring) is still awaited but earlier in April came the first comments in some time from the PPF on the proposals to establish a public sector consolidator vehicle for DB schemes – read more about the PPF’s latest thoughts on the consolidator here:

And since that update, the Government has now published its response to the March 2024 Work & Pensions Committee report on Defined Benefit pensions. The response, which you can read here, sets out the Government’s responses to the recommendations made by the committee on a range of issues including DB funding, scheme surpluses, discretionary increases (especially for pre 1997 benefits), PPF levy and compensation changes and trustee supervision and governance.

TPR’s 2025 annual funding statement – a key point for sponsors of DB schemes

In late April, the Pensions Regulator published its annual funding statement in relation to DB schemes, its first under the new funding regime. Chris Brown highlights a key takeaway for scheme sponsors in relation to TPR’s expectations when dealing with surpluses, which are an industry hot topic at the moment.

Pensions and tax

From 6 April 2025, the “double whammy” changes to employer NICs came into force. Crispin Freeman shares a reminder of how employers can use salary sacrifice arrangements for pension contributions, and identifies some key factors that will need consideration:Read more

Alice Honeywill and Nancy Purle consider lessons schemes can learn from the recent upper tribunal decision in Morgan Lloyd Trustees v Revenue and Customs Commissioners, in which payments made by a number of small self administered schemes (SSASs) were found to be unauthorised payments and subject to penal tax charges.

Pensions dashboards are go!

On 30 April the Pensions Dashboards programme reached a milestone, arriving at the first official staging date for some of the very largest schemes to connect to the dashboards architecture. Andy Prater rounds up the latest dashboards developments, including the actions schemes should be taking now.

Pensions Bites

Pensions investment lessons from Europe

Pensions investment is a hot topic in the UK pensions market, with pension schemes and their assets firmly in the Government’s sights when it comes to productive finance and the growth agenda. In this piece Alice Honeywill shares observations on the experience in the Netherlands.

Treasury Committee inquiry into AI in the FS sector

The Treasury Committee inquiry into the use of AI in the financial services sector, including in the pensions market, closed on 11 April, and Burges Salmon is among the respondents. Read more here and look out for further updates from us as and when the response is published.Read more

LGPS employer contributions – what is the role of the Actuary when contribution rates are reviewed between valuations?

Earlier this year all eyes were on the Kensington and Chelsea Pension Fund when it announced that it was reducing employer contribution rates to zero for the 2025/26 financial year. Ed Curtis and Serena Kutty explore how the relevant powers of the LGPS regulations operate, and in particular the role of the actuary in these circumstances.

Upcoming events

XPS webinar – What the Pension Schemes Bill will mean for DC schemes
08.05.2025

On Thursday 8 May, Alice Honeywill is appearing as a guest speaker on a webinar hosted by XPS, to discuss how the reforms being made by the Pension Schemes Bill, including the new Value for Money framework and requirement for schemes to provide decumulation solutions, will impact DC schemes.

Sign up

PMI’s Northern Ireland Regional Group Event – “Whose surplus is it anyway?”
14.05.2025

Our own Richard Pettit and Andy Prater will take part in a panel discussion on Defined Benefit (DB) pensions scheme surplus. Richard will be discussing pension scheme surpluses with Gregor Law and Emma McAteer and then Andy will be outlining other key legal and regulatory developments in pensions. (Non PMI members are very welcome).

Sign up

TISA Annual Retirement conference 2025
17.06.2025

We are proud to announce that we are the official legal partner for the TISA Annual Retirement Conference 2025! Join us on 17 June at Burges Salmon, London, for a day packed with insightful discussions on the future of DC pensions and consumer outcomes. Don’t miss out on this opportunity to gain insights from industry leaders and network with peers.

Sign up

Team news

A double dose of good news this month! Firstly, we are delighted to announce the promotion of 3 of our team to the role of Director – huge congratulations to Andy Prater, Helen Woodford and Samantha Howell.

And alongside those promotions we are also very pleased to welcome two new recruits – Mamunul Wahid joins us as a Senior Associate in the Bristol team and Associate India McGirr joins the rapidly growing London based pensions team (now eight in total). Welcome to the team Mamunul and India – it is great to have you on board!