HL UK Pensions Digest 8 January 2026

Happy New Year and welcome to our first update of 2026, in which we cover: 

Court approval of complex settlement

• The High Court has approved a settlement where the validity of generations of amending and consolidating deeds was in question. Hogan Lovells acted for the trustee. For our detailed review of the case, please click here;

Pension Schemes Bill: Second Reading in the House of Lords

• The Minister’s speech included interesting points concerning future guidance on fiduciary duties and the introduction of the value for money (VFM) requirements;

Pensions Regulator (TPR): consultation on collective defined contribution (CDC) code of practice

• TPR has published a consultation paper on a replacement code of practice which will cover both (i) single/connected employer CDC schemes; and (ii) unconnected multi-employer CDC schemes;

HMRC Pension Schemes Newsletter 176

• HMRC has published its Pension Schemes Newsletter 176, which includes reassurance for pensions professionals on the new tax adviser registration requirements;

Pensions Regulator (TPR) publishes its December Master Trust Bulletin

• TPR has published its latest Master Trust Bulletin, covering good practice recommendations and investment issues.

Pension Schemes Bill: Second Reading in the House of Lords 

The Pension Schemes Bill had its Second Reading in the House of Lords on 18 December 2025. It is due to start Committee stage in the Lords on 12 January.

Interesting points from the speech of the Minister of State (Baroness Sherlock) at Second Reading include the following.

Statutory guidance on fiduciary duties

The Pensions Minister (Torsten Bell) had already announced that new legislation will allow the government to develop statutory guidance for trust-based private sector pension schemes, to give greater clarity on trustees’ ability to take into account factors such as climate risk and members’ standard of living when making investment decisions.

Baroness Sherlock explained that the Pensions Minister plans to come forward shortly with more details of what the guidance will look to cover. The government intend to engage with stakeholders in producing the guidance, starting with a series of industry round tables in early 2026 (column 940).

Value for money: timeline

Baroness Sherlock gave more detail of the anticipated timeline for introducing the new value for money (VFM) requirements for defined contribution (DC) schemes (column 939).

• Early 2026: joint consultation by the Pensions Regulator and the Financial Conduct Authority;
• During 2026: consultation on draft regulations;
• 2028: implementation of the VFM framework;
• March 2028: first set of VFM metrics issued;
• October 2028: publication of first VFM assessment reports and ratings; and
• November 2028: poor performing schemes start to exit the market.

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Pensions Regulator launches consultation on new-look collective defined contribution code of practice 

On 19 December, the Pensions Regulator (TPR) launched a consultation on a draft code of practice that will replace the existing collective defined contribution (CDC) code. The new draft code will extend the current version, which at present covers single and connected employer CDC schemes, to cover unconnected multiple employer schemes providing CDC benefits (UMES CDC schemes).

More detail on the Department for Work and Pensions proposals for UMES CDC schemes is contained in our Digest of 5 November.

The draft code focuses on the requirements that trustees and others need to meet if they intend to apply for authorisation or wish to operate a CDC scheme. It attempts to distinguish clearly between legal duties and TPR's expectations. The draft code sets out:

• How to make an application for authorisation;
• The matters TPR will take into account when considering applications; and
• TPR's expectations for the conduct and practice of those who must comply with the obligations set in pensions legislation.

The consultation closes on 13 February 2026.

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HMRC Pension Schemes Newsletter 176 

HMRC has published its December Pension Schemes Newsletter (No. 176). Key points include:

• It is now possible to report a transfer to a qualifying recognised overseas pension scheme on the managing pension schemes service (MPSS). This replaces the print and post form.
• A new authenticated "look up service" for member protections and enhancements via the MPSS will be launched in early 2026.
• Our Digest of 11 December outlined certain changes made by the Finance Bill to proposals to mandate the registration of tax advisers who interact with HMRC (scheduled to come into force in May 2026). These changes were introduced, at least in part, to address concern about the extent to which the requirements might apply to pensions professionals, especially pension scheme administrators.

The Newsletter offers some comfort to administrators, by confirming that the provision of information to clients/members (for example, providing information about the annual allowance charges or holding pre-retirement information sessions) will not trigger the requirement to register with HMRC. This is because the specific activity at issue (i.e. the provision of the information) does not itself involve any interaction with HMRC.

The Newsletter also highlights the new exemption in the legislation, broadly exempting "interactions" mandated by legislation (although the precise ambit of the exemption is not entirely clear). It notes that the exemption was introduced as a response to feedback from the pensions industry that earlier draft legislation could bring pension scheme administrators and practitioners into scope through compliance with mandatory reporting requirements. It notes that "the legislation will exempt entities from the requirement to register where interactions with HMRC are carried out in response to requirements under legislation, for example: pension scheme administrators, pensions practitioners…".

These comments will provide some reassurance to pension scheme administrators. It is hoped that additional HMRC guidance will further clarify the position.

• The Newsletter contains reminders about various deadlines, including in relation to pension scheme returns and event reporting.

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Pensions Regulator publishes its December Master Trust Bulletin

The Pensions Regulator (TPR) has published its December Master Trust Bulletin, covering good practice/updates and investment issues. The key points are summarised below.

Good Practice/updates

• Dashboard connections. TPR notes that more than 60 million member records (75% of in-scope private pension records) are now connected to the dashboards system, with the focus for larger schemes now shifting to post-connection duties, including maintaining connection and data quality management.
• The potential for members to be influenced by artificial intelligence (AI). TPR suggests that trustees, with support from their advisers, could consider whether it would be appropriate to include some additional risk warnings in scheme documentation and member communications on the use of generative or other AI applications to inform decisions about pension arrangements.
• Vote reporting. The bulletin recommends, and contains links to, Pensions UK's vote reporting template and the accompanying technical guidance.
• Defined contribution (DC) fund illustrations. The bulletin sets out some technical details around the guidance to be used for DC fund illustrations.
• Updated guidance on administration. The bulletin links to TPR's updated guidance on pension scheme administration and its market oversight report on administrator relationships. The bulletin summarises its recent engagement with administrators which highlighted good practice around technology and innovation, cyber resilience and workforce development. TPR advises trustees and administrators to review their practices, leverage technology, and strengthen resilience to raise administration standards.
• Outcomes-based regulation. The bulletin summarises the key features of the Financial Conduct Authority (FCA)’s Consumer Duty, which applies to FCA-regulated firms. TPR notes that the FCA is set to consult on changes to the Consumer Duty in 2026, with new requirements coming into effect in 2027.

TPR links this to the management of pension scheme disclosures, and the risks associated with simplified or unclear disclosures on environmental, social and governance matters. TPR recommends that trustees ask their service providers to confirm:

• How the Consumer Duty applies (if at all) to the products or services they supply to the scheme;
• Whether and how the FCA labelling and disclosure requirements apply to any of the investment funds they provide to the scheme;
• Where relevant, whether any member communications provided (platform-based or otherwise) are compliant with the Consumer Duty; and
• How they monitor outcomes and ensure compliance on an ongoing basis.

• Significant event J guidance. In 2026, TPR plans to publish further guidance on significant events, in response to calls from schemes for more clarity about when to report a significant event J. A significant event J is where there has been a failure of the systems or processes used in running the scheme which has a significant adverse effect on the security or quality of data or on service delivery.
• Trustee toolkit. The bulletin confirms that TPR is reviewing and updating the trustee toolkit.

Investment issues

• Strengthening investment governance.In order to strengthen oversight, enhance resilience, and ultimately safeguard member outcomes, TPR encourages trustees to:
  • Review and update their investment governance and risk frameworks;
  • Engage with advisers to benchmark against best practices; and
  • Ensure frameworks are dynamic and adaptable to future challenges.
• Navigating market volatility. The bulletin links to TPR's guidance on recommended trustee actions in times of market volatility.
• Implementing structured equity solutions. The bulletin outlines key areas for trustees to consider when exploring these types of investments, such as a total return swap. TPR notes that trustees and providers should have a clear understanding of the structure, mechanics, costs, and associated risks of the strategy, including the implications for returns under different market conditions and the roles and responsibilities of all parties involved. TPR also notes the importance of a robust governance framework, transparency in member communications and early engagement with TPR.
• Repositioning needed in defence investing. TPR encourages trustees to develop their understanding of the range of investment opportunities that might exist in the defence sphere.

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Authored by Jill Clucas and Susanne Wilkins.