Draft legislation on pensions and IHT
Unused pension savings will be brought into the scope of
Inheritance Tax (IHT) from April 6, 2027, although death in service
lump sums and DB dependants' pensions will fall outside the
scope of
IHT. For more details, see 'Have your say' below.
Action: The exact scope of the changes remains unclear in some aspects; contact your usual AOS adviser for further information.
Government to provide Virgin Media fix
The government has announced that it will help with uncertainty following the Virgin Media decision (which held that certain amendments made by schemes that were contracted-out on a section 9(2B) basis between 1997 and 2016 are void unless a necessary actuarial confirmation was provided). The government will "give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards". No further details are currently available. A high court decision is expected shortly, which may further clarify the scope of the issues.
Action: Review the timing of any Virgin Mediarelated projects in light of these developments.
TPR endgame guidance
The Pensions Regulator (TPR) has published new guidance for DB schemes when deciding their endgame strategy. The guidance discusses running on schemes and sharing surplus with employers, as well as a number of other endgame options.
ACTION: Take the guidance into account when considering endgame strategy.
Pension Schemes Bill 2025 published
The Pension Schemes Bill has been published, containing a raft of changes to the pensions landscape, including: easier release of DB surpluses to employers; a DC value for money framework; requirements for master trusts and GPPs to have a default fund with a minimum level of assets under management and potentially a prescribed level of investment in "productive assets"; a framework for consolidation of small, dormant DC pots; requirements for schemes to provide DC members with a guided retirement product; and a legislative framework for DB superfunds. Read more in the "What's new this week" June article.
Action: Keep a watching brief as the bill progresses and regulations are published. Arrange training on the aspects that affect your scheme.
TPR annual funding statement
TPR has published its latest annual funding statement. It addresses the application of the new DB funding regime (focusing on assessing and monitoring employer covenant and supportable risk); approaching scheme surpluses; and considerations in relation to macroeconomic uncertainty.
Action: Review the guidance and take any relevant recommended actions.
TPR guidance on market volatility
TPR has published a market oversight report setting out guidance for trustees on preparing for and responding to market volatility in light of recent trade and geopolitical tensions. It sets out best practice actions for trustees of DB and DC schemes.
Action: Review the guidance and consider which actions are relevant to your scheme.
Dashboards: DPIA and new guidance
The Pensions Dashboards Programme (PDP) has published its data protection impact assessment (DPIA) for processing in relation to the central dashboards architecture. Schemes are responsible for completing a DPIA for their own dashboards processing.
TPR has updated its dashboards initial guidance. Guidance from PASA includes reassurance from TPR for schemes with split administration (e.g. a separate AVC provider) that cannot connect all benefits on the same date. PASA has also published updated data matching guidance.
Action: Ensure your scheme/administrator/ISP is on track for complying with your dashboards connection deadline. Complete a DPIA for your scheme's dashboards processing.
Have your say
- The government has published a consultation response, policy paper and draft legislation on bringing pensions into the scope of Inheritance Tax (IHT) from April 6, 2027. Key points to note are (a) death in service benefits will fall outside the scope of IHT; (b) personal representatives (not pension schemes) will be responsible for reporting and paying any IHT due; and (c) schemes will be subject to new duties, including a "scheme pays" - style mechanism for settling IHT bills. The draft regulations are open for consultation until September 15, 2015.
- The government has launched a call for evidence seeking views on the detail of the pension schemes bill by September 2, 2025.
Watch this space
- The government intends to consult on trustee accreditation and governance later this year.
- Regulations allowing multiple unconnected employers to establish a CDC scheme are expected in the autumn.
- The Data (Use and Access) Act (DUA Act), which makes amendments to the UK General Data Protection Regulation and Data Protection Act 2018, has received royal assent. Changes include helpful tweaks to deadlines for responding to data subject access requests and new requirements around handling data protection complaints. Many of the changes need regulations before coming into force.
- There is currently no date for revised regulations on changes to the notifiable events regime.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
