As the Pension Scheme Act moves onto the statute books there will be swathe of new consultations issued over the next year, covering a number of key DC and DB pension reforms.
This will include a more details consultation on the Value for Money framework, which will will focus on detailed metrics, benchmarking and comparator data, alongside potential intervention thresholds that could enable regulator-led consolidation or scheme closure.
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.
It is expected that there will also be further consultations on DC consolidation and “mega fund” requirements, to set out the framework for schemes targeting £25bn scale, with key discussion on the transition pathways for sub-scale scheme. This could also cover safeguards for without-consent transfers, which will be allowed for the first time for GPP members under the rules being set out in this Bill.
Alongside this there is likely to be more details information on small pots consolidation which will look at automated consolidation mechanics, default receiving schemes and potential opt-outs, alongside integration with pensions dashboards and data frameworks.
Finally, there will be consultations on surplus extraction rules for DB schemes and a new DB superfund framework.
Broadstone head of policy David Brooks says: “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.”