Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.
The Department for Work and Pensions (DWP) has published its consultation on draft guidance relating to pension fund trustees’ investment and fiduciary duties. The draft guidance looks at a variety of issues, including financially material considerations and non-financial considerations when making investment decisions.
The draft guidance also touches on taking account of members’ views and what is meant by “best interests of members”. Some practical examples are set out at the end of the draft guidance. Consultation closes at 11:59 p.m. on 27 January 2027.
The DWP has published its response to consultation concerning proposed amendments to the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021.
The 2021 regulations were designed to protect members from pension scams by imposing conditions that must be met before a pension scheme can action a request from a member wishing to exercise a statutory right to transfer pension benefits to another pension scheme. The government has confirmed that it plans to make the following amendments.
If the trustees consider that the receiving scheme is a “reputable” pension scheme, they will be able to process the statutory transfer with fewer checks.
Restrictions that apply where the receiving scheme contains overseas investments will be removed.
An exemption from the requirement to take Money and Pensions Service (MaPS) guidance will apply where the member has already received this guidance in the last 12 months (unless the proposed transfer is to a small self-administered scheme (SSAS)).
The introduction of a restriction preventing transfers to a receiving scheme where the member does not have an “employment link” with that scheme. It appears that this will be targeted at transfers to SSAS arrangements and even if the required employment link can be established, the member will still need to obtain MaPS guidance before a statutory transfer to a SSAS can proceed.
It is planned that the changes will come into force in April 2027.
The government has published a draft Finance Bill. Clauses 24 to 29 contain draft legislation to implement certain pensions measures announced at Budget 2026.
These relate to the introduction of a new pensions tax allowance for individuals who have reached state pension age, removal of the two-year deadline for paying death benefits, collecting tax due on excess lump sum death benefits and relaxation of HM Revenue and Customs’ (HMRC’s) serious ill health lump sum rules. We summarised these measures in our weekly update on 4 November 2026.
The bill also includes draft legislation setting out the tax treatment in relation to the release of surplus to pension scheme members. This mainly reflects the draft legislation previously consulted on, with a few clarificatory tweaks. For example, the legislation contains several conditions that must be met in order for a payment of surplus to members to be authorised.
One of the conditions is that the payment would have been an authorised employer surplus payment if the right to receive the payment had been granted to the sponsoring employer of the pension scheme. The bill provides additional clarification around this condition. The bill also deals with the scenario where assets are first transferred to another registered…
