High Court approves equalisation compromise
The High Court has approved a compromise of an equalisation issue affecting the industry-wide Motor Industry Pension Plan (Ross Trustees Services Ltd v. Rowe).
The case concerned whether equalisation of normal retirement ages (NRA) of male and female employees was successfully achieved by a trust deed and rules executed in 1992. If so, then age 60—the most favourable retirement age under the plan rules—would be the applicable NRA for all employees from May 17, 1990 (the date of the Barber judgment) until the date of the 1992 deed, when it would change to an NRA of 65. If the 1992 deed was not effective then the NRA of 60 would continue to apply, potentially until April 5, 1999, when a further trust deed and rules was executed.
The parties to the dispute had proposed a negotiated compromise, based on the relative merits of the competing arguments (which were characterised as being 66:34 in favour of there having been no effective equalisation in 1992). The proposal resulted in a different NRA (61.7 years) applying from May 13, 1992 to April 5, 1999, and 65 years thereafter.
The court viewed this settlement as mutually beneficial in achieving a speedy outcome which resolved ongoing uncertainty and simplified the future administration of the plan. As half of the 166 sections of the Plan have been transferred to the Pension Protection Fund or are administered by it, the order included specific terms to allow for further communication with members of those sections and to allow for clarification of any matters relating to implementation.
Read the High Court decision.
TPR reports on regulatory intervention resulting in settlement of s75 debt
The Pensions Regulator (TPR) has published a regulatory intervention report explaining its use of anti-avoidance powers in relation to an employer participating in the Plumbing & Mechanical Services (UK) Industry Pension Scheme. The employer, Cliden Construction Limited (CCL), was one of more than 300 employers in the scheme, which is in deficit. CCL ceased to employ active members of the scheme in early 2019, triggering a section 75 withdrawal debt of around GBP250,000.
However, TPR found that CCL and connected parties had taken steps to avoid that debt including issuing dividends prior to the company’s liquidation, such that CCL’s assets were reduced and funds were not available to pay the debt.
TPR issued a Warning Notice seeking Contribution Notices against CCL and connected parties. After a complex process in which TPR also had to use its powers to compel witnesses to attend interviews and issued a fixed penalty against CCL’s accountants for failing to comply with statutory information requests, a settlement was reached and the funds have now been paid to the scheme.
The amount of the settlement has not been disclosed. TPR comments that “where we agree a settlement, the amount and whether to disclose it is determined on a case-by-case basis reflecting any relevant, mitigating or aggravating factors. We consider the time and costs involved in our actions, the circumstances of the scheme, the circumstances of targets of our regulatory action, and the realistic possibility of achieving a better outcome through more protracted enforcement action”.
Read the regulatory intervention report and the press release.
SPP guidance on AI governance
The Society of Pension Professionals (SPP) has published a paper setting out how trustees should apply existing fiduciary and governance duties to AI use across pension schemes. The paper covers trustees’ own use of AI, adviser/administrator AI use, automated decision-making, data governance, incident and breach management, employer covenant impacts, contracting, and members' external use of AI tools. It sets out practical actions for trustees, including:
- At a minimum, trustee controls and assurance should ensure: no sensitive scheme data is input into unapproved tools; outputs are independently reviewed; tool usage aligns with scheme and employer policies; and AI is not used for decision-making without human validation.
- AI considerations should be integrated into existing trustee systems and processes, such as risk registers, risk management and breach frameworks.
- Trustees should consider whether a more formal AI governance operating model is needed, for example including ownership, an AI use-case register, approval processes and reporting.
- AI use by advisers and administrators should be questioned and controls put in place.
- Trustees should mitigate risks arising from member AI use, for example consider AI-related risk warnings.
- Covenant monitoring processes should be adapted to capture the emerging opportunities and threats.
Read the AI governance paper.
HMRC: latest Pension Schemes Newsletter
HMRC has published its latest Pension Schemes Newsletter (no. 183). The newsletter refers to the new regulations on information sharing requirements once pensions become subject to inheritance tax (IHT). HMRC expects related statutory instruments to be laid later in 2026 covering sub-schemes and excepted estates. It also plans to publish a further IHT technical note later this summer including information on withholding and payment notices, worked scenarios and common industry queries. HMRC invites feedback on areas for future guidance.
The newsletter includes a reminder of the consultation on regulations enabling authorised payment of surplus direct to members, which closes on September 7, 2026. It also covers annual returns for relief at source, changes to how HMRC can be contacted and closure of the Pension Schemes Online service from April 2027.
Read the Pensions Schemes Newsletter.
TPR: updated DB superfunds guidance
The Pensions Regulator (TPR) has updated its guidance for those setting up and running a DB superfund. The guidance now includes a new definition of “Adjusted Section 179 funding level”, an amended definition of “Wind-up trigger”, and updated “Mortality improvements” wording.
Read the updated superfunds guidance.
Consultation on PPF assumptions
The Pension Protection Fund (PPF) is consulting on changes to the assumptions used in (i) section 143 valuations carried out during PPF assessment periods, and (ii) section 179 valuations used for various purposes. The main proposed changes concern discount rates and longevity assumptions, and are intended to keep the assumptions aligned with current buy-out pricing. The changes would generally reduce estimated scheme liabilities under the valuation bases.
Read the PPF consultation.
