Marvin OnumonuThe Pension Schemes Bill has passed through Parliament and is set to receive Royal Assent, opening the door to a detailed set of consultations that will decide how changes are put in place across defined contribution (DC) and defined benefit (DB) pension schemes.
These consultations will focus on areas like Value for Money, consolidation, decumulation, and endgame options.
The process is expected to take the next 12 to 24 months, with trustees and employers urged to stay involved as the details are worked out.
For DC schemes, the first consultation will look at value for money, covering metrics, benchmarking, and rules that could lead to regulator-led consolidation or scheme closure.
There will also be new requirements for disclosure and closer alignment between The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA).
Another consultation will look at default pension benefit solutions, including what counts as a default at retirement, how longevity risk is handled, and rules for trustees dealing with non-engaged members.
Further work will cover consolidation, especially for schemes aiming to reach £25bn in size, and the transition of smaller schemes.
The consultations will also tackle small pot consolidation, how automated processes might work, opt-outs, and links with pensions dashboards.
Rules on surplus extraction, including funding levels, actuarial sign-off, member safeguards, and tax interaction, will also be reviewed.
The defined benefit side will see consultation on a superfund framework, including authorisation, capital requirements, and transfer tests for trustees.
More consultations are set for later in 2026, including on statutory guidance, FCA rule alignment, pensions tax, and CDC guidance.
David Brooks, head of policy at Broadstone, said: “With the Pension Schemes Bill nearing Royal Assent, attention now turns to a significant programme of detailed consultations that will determine how these reforms operate in practice across DC and DB.
“The measures coming forward are highly inter-related, covering value for money, consolidation, decumulation and endgame options, and the challenge will be to ensure they are developed in a coherent way rather than in isolation.
“The next phase of consultations will need to keep a clear focus on how these reforms improve member outcomes in practice.”
Brooks added: “Consideration of UK productive finance should form part of that assessment, but always through the lens of member value, security and retirement outcomes.
“With a rolling pipeline of consultations expected over the next 12 to 24 months, trustees and employers will need to remain closely engaged as the detail is shaped.”
Maurice Titley, commercial director: data & dashboards at Lumera, said: “The progression of the Pension Schemes Bill to Royal Assent is a landmark moment that heralds a significant evolution of the UK’s pension system.
“For trustees and providers, the legislation will create a regulatory environment that definitively requires strong governance and robust data to adapt.
“In the DC market, the reforms will usher in a period of accelerated consolidation activity as providers look to achieve scale.”
Titley added: “The growing focus on providing default retirement solutions and Value for Money will force providers to invest in their data and administration systems to ensure that their operations are able to cope with this shift.
“Ultimately, technology is likely to be the defining differentiator in this new environment.
“The challenge for the industry is not understanding what needs to be done but delivering it safely and consistently within live systems while maintaining member trust.”
