HL UK Pensions Law Digest 11 August 2025

Welcome to our latest update, in which we cover:

Pensions Regulator: successful action to boost scheme funding

• Enforcement action by TPR, combined with a ruling from the Upper Tribunal, will result in approximately £2.5m being paid to a defined benefit (DB) scheme in deficit;

Pensions Dashboards: user testing

• A blog explaining the Pensions Dashboards Programme’s approach to user testing;

PASA guidance: protecting member data

• Steps schemes can take to improve the security of member data.

Pensions Regulator: successful action to boost scheme funding 

The Pensions Regulator (TPR) has announced that enforcement action it has taken, combined with a ruling by the Upper Tribunal, will result in approximately £2.5m being paid into a defined benefit (DB) pension scheme in deficit. Further details are given below.

Background

• Discovery Flexibles Limited (DFL) is the sole sponsoring employer of the Danapak Flexibles Retirement Benefits Scheme (the “Scheme”), a DB scheme closed to future accrual. As of March 2023, the Scheme had a deficit on the technical provisions basis of £10.5m and a buyout deficit of £13m.
• DFL’s parent company, Discovery Flexibles Holdings Limited (DFHL), was owned by members of the same family: CW, PW (CW’s brother), AP (CW’s sister) and their parents. AP, who was the applicant in the Upper Tribunal reference, had a 25% shareholding in DFHL.

Regulatory and enforcement action

• CW was chief executive of DFL and was also chair of the trustees of the Scheme, until TPR banned him from being a trustee in 2017 and appointed an independent trustee. The independent trustee alerted TPR to further concerns about the Scheme.
• TPR’s subsequent investigation showed that money had been extracted from DFL between 2008 and 2019, while the Scheme was in deficit and DFL was paying only minimal deficit repair contributions, in reliance on its being financially weak.
• TPR was concerned that, among other things, DFL had drawn £800k from its banking facility and had indirectly distributed part of this money to AP and PW, in return for the sale of their shares in DFHL.
• TPR sought to impose contribution notices (CNs) on CW, EW (CW’s wife), PW and AP, arguing that the extraction of funds had caused the scheme material detriment.
• In October 2023, CW and EW reached a settlement with TPR, in which they agreed to pay £2m into the Scheme.
• TPR’s Determinations Panel decided that CNs of £217k plus interest should be imposed on each of PW and AP.
• PW paid £222k to the Scheme (being £217k plus interest). However, AP challenged the imposition of a CN against her and made a reference to the Upper Tribunal.

Upper Tribunal’s decision

• The Upper Tribunal upheld the issue of a CN to AP. The Tribunal rejected her argument that a person should only be considered a “party” to an act for the purposes of issuing a CN if the person had procured the transaction or been a decision maker in relation to it. Instead, being a “party to” an act (or failure to act) should be given its ordinary dictionary definition: “a person who is concerned in an action or affair; a participant; an accessory”.
• In reaching its decision to uphold the CN, the Tribunal noted the following.
• It was clear that AP was an active party to the sale of her shares in DFHL and she knew that the finance for the transaction would come from DFL’s own resources.
• When considering whether the “material detriment” test was met, it was not necessary to show that the act (or omission) actually had impacted the Scheme’s ability to satisfy accrued benefits: it was sufficient to show that the act had detrimentally affected in a material way the likelihood of those benefits being received.
• If the transaction had not taken place, DFL might have been able to draw on the £800k facility and use the money to discharge some of its obligations to the Scheme or to invest in its business, and so potentially increase the chances of its being able to support the Scheme in future.

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Pensions Dashboards: testing the MoneyHelper Pension Dashboard 

The Pensions Dashboards Programme (PDP) has published a blog on its approach to consumer testing for the MoneyHelper Pensions Dashboard.

PDP plans to use a three-step testing framework:

• First step: testing with pension industry experts to validate data accuracy;
• Second step (also referred to as “phase 1”): targeted consumer testing with a small number of users and up to 15 connected schemes, through in-person and remote sessions. Information will be shown on the State Pension, defined benefit (DB) and defined contribution (DC) pensions; and
• Third step (also referred to as “phase 2”): increasing scale with up to 20,000 users and more complex scenarios.

The testing will involve users across different demographics and characteristics. PDP plans for around 20% of the test users to be individuals with access needs or low digital skills, to help with the creation of a more accessible and effective service. Recruitment of users for phase 2 will be carried out through pension providers and schemes, specialist recruiters, pre-screened panels, charities and other networks.

PDP intends to provide regular feedback to the pensions industry throughout the user testing process. It expects that insights from testing will support industry-wide improvements and the development of additional pensions dashboards, as well as future iterations of the MoneyHelper Pensions Dashboard.

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PASA Guidance: protecting member data

The Pensions Administration Standards Association (PASA) has issued guidance for trustees and pension providers on protecting member data. Key points include the following.

• The detailed personal information on members held by pension schemes is a prime target for cybercriminals. The introduction of pensions dashboards will increase the personal data available to schemes.
• Human action can represent the weakest link in data security. Employees’ access to data should be limited to the level required for their role. Users should be kept up to date on the latest threats and security protocols, including through annual refresher training.
• Trustees and administrators should prepare, maintain and test detailed data breach response strategies. Trustees should expect any third party providers to comply with strict security standards.
• Trustees’ effective system of governance (ESOG) and own risk assessment (ORA) should incorporate regular reviews of data security and identification of potential vulnerabilities.
• The security surrounding how members access their data can be enhanced though using a secure portal and advanced verification procedures, such as one-time codes or biometric data.
• Member communications can be at risk of interception, especially if out of date postal addresses or unverified email addresses are used.
• Secure channels of communication, such as member portals, should be used where possible.

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Authored by Jill Clucas.