The Pension Schemes Bill was published on 5 June 2025 alongside a Government “roadmap” indicating when the changes might come into force.  We consider which items from the Bill should be on the agendas of defined benefit scheme trustees.

1.  Section 37 certificates: nothing in the Bill yet, but that could change!

On the day the Bill was published, the Government announced that it will introduce legislation to allow schemes to obtain retrospective actuarial confirmation that historic benefit changes met the necessary standards. This should mean that past amendments are no longer at risk of being invalid solely because no “section 37 certificate” was obtained from the scheme actuary at the time.  We don’t yet know whether this change will be included in the Bill or other legislation.  If the Bill is used, any change is likely to take effect in 2026 at the earliest..

2.  Changes to surplus rules, but not until 2027

As expected, the Bill introduces a new power for trustees to modify a scheme to allow surplus payments to an employer. (See our e-bulletin for more detail.)   The roadmap suggests the changes won’t take effect before 2027.  We don’t yet know what funding threshold will need to be met for a surplus payment to be permitted.  The modification power won’t apply to a scheme already in winding-up.  The significance of this change for individual schemes will depend on what their existing rules say on surplus and how well funded the scheme is.

3.  Power for Ombudsman to authorise recovery of overpayments

Currently schemes need a court order to exercise a right of set off to recover past overpayments (unless the member agrees to the set-off).  The Pensions Ombudsman is not a court for this purpose, meaning that trustees still need to go to court even where the Ombudsman has determined that a right of set-off can be exercised.  The Bill provides that there is no need to court if the Ombudsman has ruled on the amount due from the member to the scheme.  This change takes effect 2 months after the Bill is passed, likely to be in early 2026.  

4.  Changes to the rules on PPF levies

The PPF would be happy to set a zero levy for the levy year 2025/26, but a quirk in the current legislation means that a zero levy would prevent the PPF from raising the levy again in future.  The Bill contains provisions designed to address that issue.  The PPF has said it will take a final decision on the 2025/26 levy “in due course” and expects to provide an update by the end of July this year.  

5.  Pensions superfunds

The Bill makes provision for a statutory pension superfund regime under which a scheme which is not in a position to secure benefits in full via a buy-out can transfer its assets and liabilities to an authorised superfund where that makes it more likely that the transferred liability will be satisfied in full.  A pensions superfund regime has already existed for some time, regulated largely via Pensions Regulator publications rather than legislation.  The new statutory regime is expected to come into force in 2028.  Many schemes are currently too well funded for a superfund transfer to be an option, but trustees of schemes where a superfund transfer is a possible option in the medium term should keep a close watch on developments.

6.  Will money purchase AVCs be affected by the Bill’s money purchase provisions?

The Bill introduces some significant new compliance requirements for schemes providing money purchase benefits.  These include a requirement for trustees to carry out a detailed “Value for Money” (VfM) assessment in which they compare their scheme to other schemes and must take action if the scheme is assessed as not providing VfM.  There will also be new requirements to provide a “default pension benefit solution” to provide members with a regular income in retirement.  The Government expects these measures to take effect in 2028. Based on past experience, we think it likely that schemes will be exempted from these requirements if the scheme’s only money purchase benefits derive from AVCs.  However, this point has yet to be confirmed.