TPR: Market oversight report on LDI
The Pensions Regulator (TPR) has published its latest market oversight report, examining how well pension schemes are prepared for liability-driven investment (LDI) risk. TPR notes that there have been significant moves to improve resilience in the LDI sector since the 2022 gilt crisis, including higher interest rate buffers, improved recapitalisation processes and a greater focus on liquidity. In tandem, schemes have put in place more robust LDI processes and materially reduced the size and duration of their LDI exposures.
TPR sets out its expectations of schemes including:
- only investing in leveraged LDI arrangements which have an appropriately sized buffer: an operational buffer specific to the LDI arrangement to manage day-to-day changes, plus a minimum buffer of 250 basis points to provide resilience in times of market stress
- understanding when cash calls occur and having processes for meeting calls within five days
- diversifying collateral assets to avoid concentration risk and considering whether the plan for which assets are used to meet a cash call is flexible enough to respond to market conditions at the relevant time
- carrying out periodic stress tests
- maintaining robust governance.
Read the report.
HMRC: Latest pension schemes newsletter
HMRC has published its latest pension schemes newsletter (no. 173). It announces that regulations to address outstanding technical issues following the abolition of the lifetime allowance (LTA) are being prepared. They will be consulted on later this year, with the aim of being made in early 2026. When introduced, the changes will have retrospective effect from April 6, 2024. The regulations will focus on ensuring that:
- where lump sums paid from an overseas pension scheme to a UK resident are equivalent to a lump sum paid from a registered pension scheme that would be tax-free or have a tax-free element, these will continue to be treated similarly
- the valuation of a member’s relevant crystallised pension rights for trivial commutation lump sums is consistent with the rules in place prior to April 2024.
- the calculation of scheme-specific pension commencement lump sums operates as intended
- provisions are put in place for stand-alone lump sum values to be transferred to a receiving scheme
- the treatment of enhancement factors is consistent with the rules in place prior to April 2024.
The newsletter also discusses the tax position of tax-free lump sums paid back into a registered pension scheme, in particular in the context of FCA-regulated schemes. FCA rules require consumers to have a right to cancel a contract in certain circumstances and where they exercise that right there will be no tax consequences. The newsletter confirms that a contract allowing a person to take a pension commencement lump sum or uncrystallised funds pension lump sum is not covered by those FCA rules, so once lump sums are paid, the associated tax consequences cannot be undone (even if the payment is returned or cancellation rights are exercised). The FCA has published an accompanying statement.
The newsletter also includes reminders on submitting pension scheme returns and annual returns for relief at source, and updates on reporting a transfer to a qualifying recognised overseas pension scheme (QROPS) together with an invitation to participate in user research on that process.
Read the Newsletter.
ECCTA: New LLP requirements
Various sets of regulations have been made relating to the Economic Crime and Corporate Transparency Act (ECCTA). ECCTA established the framework for a range of changes intended to prevent the use of corporate entities for criminal purposes. One key area covered by the new regulations is the application of relevant ECCTA requirements to limited liability partnerships (LLPs), including: identity verification requirements for LLP members and People with Significant Control (PSCs) of LLPs; prohibitions on the appointment of disqualified directors to LLPs; and the removal of the requirement to keep "local" registers of information relating to LLP members and PSCs. These requirements are expected to apply from November 18, 2025; any schemes with LLP structures should ensure they are ready to comply.
Other regulations make changes to the information that needs to be provided to Companies House in relation to PSCs (largely to ensure that Companies House still receive all of the information they did under the previous framework) and make various other consequential and miscellaneous minor amendments.
Read the Limited Liability Partnership Regulations, The Register Of People With Significant Control (Amendment) Regulations 2025 and The Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025.
TPR blog post on innovation
TPR has published a blog post discussing its approach to encouraging innovation. This follows its second innovation event, which involved 50 industry leaders. The blog post highlights the importance of co-operation to ensure innovation takes into account the needs of savers, employers, trustees and providers, and creating an environment conducive to allowing new approaches to be tested. It also sets out seven principles being used as a guide for supporting innovation. TPR encourages the industry to engage with it on innovation.
Read the blog post.
No PPF levy for 2025/26
The Pension Protection Fund (PPF) has announced that it will not charge a PPF levy for the 2025/26 levy year. The decision has been made in light of the progress being made on the Pension Schemes Bill, which will give the PPF greater flexibility to set the levy at zero while retaining the ability to reinstate it if needed.
Read the announcement.
Pensions academy online, October 7 and Thursday, October 9, 2025
Our next Pensions Academy Online sessions will take place on Tuesday, October 7 and Thursday, October 9, 2025. Each webinar begins at 9:30am and will last approximately one hour. We will be covering:
Legal update—Tuesday October 7, 2025
We’ll round up all the latest developments and outline what’s on the pensions horizon.
Pensions 2030 and beyond: preparing now for the future (DC-focused) landscape—Thursday, October 9, 2025
The Pension Schemes Bill currently going through Parliament heralds significant change across the UK pensions landscape, with a shift towards fewer, bigger and better-performing DC offerings. We’ll look at how the big picture fits together, from the perspectives of trustees, employers and members, to help you plot a route from here to there.
If you would like to attend please register here.
