UK Pensions: What’s new this week? May 12, 2025

TPR guidance on handling market volatility

The Pensions Regulator (TPR) has published a market oversight report setting out guidance for trustees on preparing for and responding to market volatility in light of recent trade and geopolitical tensions.

The report sets out key areas of best practice for trustees. For DB schemes these include:

• Ensuring short-term liquidity and cashflow requirements can be met, including assessing cash outflows; monitoring liquidity buffers under liability-driven investment mandates; and looking at cashflow needs arising from currency hedging. Trustees should also monitor changes in member behaviour that could increase cash demands and be alert to any delays to expected deficit-repair contributions.
• Checking the investment strategy remains appropriate: consider reviewing rebalancing arrangements, concentrations of risk, the timing of any pre-agreed asset transitions and resilience to tail risks.
• Ensuring scheme investment and risk governance can respond quickly to market developments: for example, checking that operational aspects, such as authorised signatory lists, are up to date and that investment governance structures are optimised.
• Understanding the impact on the employer covenant: consider to what extent the employer’s business, including key customers and suppliers, may be affected in the short or longer term and, if there is material exposure, consider potential mitigations for the scheme.
• Reacting to investment opportunities and funding level changes.

For DC schemes:

• Considering member behaviour/communications, including whether to provide guidance about the implications of current market conditions; encouraging members to seek advice and guidance before switching funds to avoid crystallising losses; and reminding members to be aware of scams.
• Reviewing the investment strategy, including rebalancing arrangements, any concentrations of risk in funds and whether any planned transition activity remains appropriate.
• Identifying potential opportunities and considering potential evolution of the investment strategy or investment and governance arrangements at an appropriate time.

Read TPR’s report.

PASA dashboard guidance: schemes that are unable to connect on a single date

The Pensions Administration Standards Association (PASA) has published guidance for schemes where split administration means not all benefits can be connected to the dashboards infrastructure on the same date, setting out a step-by-step suggested approach for schemes with multiple administrators, with different routes depending on whether or not all parties will be able to connect at the same time.

The dashboards legislation requires all sections of a scheme to connect on the same date, but where a scheme has more than one administrator (for example, they have a separate AVC provider) this may not be possible. This might be because (i) not all providers are ready at the same time, or (ii) due to Pensions Dashboards Programme (PDP) scheduling, not all Integrated Service Providers (ISPs—third parties who connect to the ecosystem on behalf of pension providers and schemes) associated with a scheme are connected at the scheme’s staging date.

The guidance includes correspondence with TPR and the FCA which confirms that ‘Both regulators will take a pragmatic approach taking into account the potential impact on members. Occupational schemes should follow TPR’s breach of law guidance to consider whether they need to report such a breach to them with relevant remedial activities. TPR will not normally consider this breach to be materially significant if prompt and effective action is taken to connect the rest of the sections by the connection deadline, October 31, 2026.’

More specifically, in relation to scenario (ii), correspondence from TPR confirms that at present, ‘there will be no regulatory intervention for pension providers and schemes who are unable to meet their connect by dates in guidance solely due to their dependence on a volunteer participant who has yet to connect.’

Read PASA’s guidance.

TPR: updated guidance on third-party applications

TPR has updated its guidance on how third parties can apply to it to use certain powers, such as the power to extend a deadline for a cash equivalent transfer, appoint an independent trustee to a scheme or revoke an order prohibiting a person from acting as a trustee. The guidance has been updated to clarify what information an applicant should supply so that their application can be assessed as swiftly and effectively as possible. The guidance includes considerations to be aware of before an application is made, details of the process TPR will follow, how to withdraw an application and how to challenge a decision.

Read the updated guidance and accompanying press release.