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Lords Committee Day 5: Clause 40 - DC consolidation, single default with common investment strategy, £25bn scale threshold and private markets mandation examined; no non-government amendments passed; further debate scheduled.

Published on: 27 January 2026

Published by a LexisNexis Pensions expert
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Original news Source: Hansard: Pension Schemes Bill, Volume 852: debated on Monday 26 January 2026

News summary Day 5 of the House of Lords Grand Committee’s line-by-line review of the Pension Schemes Bill on 26 January 2026 centred on an intensive interrogation of Clause 40. This provision sets out scale conditions, shapes default arrangement design and confers reserve powers over asset allocation for defined contribution workplace pensions.

At its heart—and the focus of exchanges—was a duty on large schemes to run a single main scale default arrangement (MSDA) under one shared investment strategy. Members from all benches pressed ministers on the drive for scale, the suggested £25bn asset threshold, the contraction of default choices into a single approach, and how far reserve powers might compel investment in private markets.

For the government, the Minister of State for Work and Pensions, Baroness Sherlock, maintained that Clause 40 is vital to better outcomes for savers through consolidation, contending that scale and aligned strategies will cut fragmentation and bolster governance.

No non-government amendments were agreed; one small government technical tweak went through, and the sitting concluded with the remaining amendments postponed to a later session...

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