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Pension Schemes Bill 2025: DB surplus returns, Local Government Pension Scheme pooling, DC value for money, small pots and default retirement pathways, superfund authorisation: key provisions and implications

Published on: 24 June 2025

Published by a LexisNexis Pensions expert
Legal News
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Article summary

What is the background to the Pension Schemes Bill?

The Pension Schemes Bill reached the House of Commons on 5 June 2025, which was hardly unexpected. It had featured in the King’s Speech at the State Opening of Parliament for the new Labour Government in July 2024, and has been referenced on numerous occasions since. As is common with pensions legislation, it was designed to encompass a variety of issues, several of which had been under consideration by the Department of Work and Pensions (DWP) for some years. Accordingly, its eventual arrival was widely anticipated.

What are the key measures/provisions in the Bill?

The Bill is arranged in five parts. The first part concentrates on defined benefit (DB) schemes and addresses two quite distinct matters:

  • Asset pooling for the Local Government Pension Scheme.
  • Allowing trustees to agree to the return of surplus in a DB scheme to the employer, which, among other things, removes the restrictions under section 251 of the Pensions Act 2004 on paying surplus to employers.

Both of these chapters are expected to rely heavily on regulations yet to follow...

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