Following a period of ‘ping pong’ between the House of Commons and the House of Lords, the Pension Schemes Bill has completed its journey through Parliament.
Yesterday evening, a compromise was reached around controversial mandation powers meaning that the Bill is now set to receive Royal Assent where it will become law.
The Bill paves the way for a wide-ranging programme of consultations that will shape how key reforms are implemented across both the defined contribution (DC) and defined benefit (DB) markets.
A series of consultations is now set to lay out the detailed rules behind the headline policy direction already established in recent years, with industry stakeholders expected to engage closely as the regulatory framework is finalised.
On the DC side, a consultation on Value for Money (VfM) will focus on detailed metrics, benchmarking and comparator data, alongside potential intervention thresholds that could enable regulator-led consolidation or scheme closure. It will also cover enhanced disclosure requirements and alignment between The Pensions Regulator and the FCA.
A separate consultation on DC decumulation and default pension benefit solutions will define what constitutes a default at retirement. This includes income objectives, longevity risk considerations, trustee duties for non-engaged members, and how default pathways interact with drawdown and annuity products.
Further consultations on DC consolidation and 'mega fund' requirements is expected to set out the framework for schemes targeting £25bn scale, with key discussion on the transition pathways for sub-scale scheme and further consideration exemptions, governance standards and safeguards for without-consent transfers. Alongside this, small pots consolidation will need to examine automated consolidation mechanics, default receiving schemes, opt-outs, and integration with pensions dashboards and data frameworks.
Surplus extraction rules will consider funding thresholds (moving towards a low dependency basis), actuarial certification requirements, trustee decision-making duties, member protection safeguards, and interaction with the 25% tax charge.
In parallel, a DB superfund framework consultation is likely to be required to define the operational regime for superfunds, including authorisation criteria, capital buffers, ongoing supervision requirements, and trustee transfer tests.
Further supporting consultations are expected in H2 2026, including updates to TPR statutory guidance, FCA rule alignment for contract-based schemes, and follow-on work on pensions tax and CDC guidance.
David Brooks, head of policy at financial services consultancy 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. 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 for data and dashboards at Lumera, commented: “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.
“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.”
Jamie Jenkins, director of policy at Royal London, added: “The passing of the Pension Schemes Bill signals the biggest changes to pensions since automatic enrolment was introduced over a decade ago.
“While the Government has had to compromise in a few areas, the substance of the Bill remains largely unchanged since it was introduced almost a year ago. The UK pensions system will therefore transition to one with fewer, larger pension providers with much greater focus on scale for investment, and value for savers.
“The core changes in the Bill command broad consensus, but the devil will now be in the detail as to how the various elements will work, and how they can work in harmony. What lies ahead is a large-scale change programme that requires careful management and sequencing. With pensions tax changes underway in 2027, 2028 and 2029, and a Pensions Commission mulling a longer term strategy, a period of stability in pensions policymaking is now critical if we are to make the Bill a success."
