PENSION ADMINISTRATION TECHNICAL HELP
PATHways 184
Highlighting pensions news and legislation that has
particular relevance to what we do in pension administration
In this edition of PATHways, we cover:
- Inheritance tax on pensions
- Technical note on inheritance tax treatment of pensions
- Consultation on changes to the ‘Provision of Information’ regulations
- ICO blog on new data complaints process
- HMRC Pension schemes newsletter 181
- FRC guidance on Virgin Media remedy
- TPR updates
Steve Marks contributed to the writing of this newsletter.
Inheritance tax on pensions
Reforms to the inheritance tax (IHT) treatment of pensions are due to come into force from 6 April 2027 and HMRC continues to provide materials during the preparation phase aimed at supporting these changes.
Technical note on inheritance tax treatment of pensions
HMRC published a technical note on 11 May 2026 to help explain how the legislation will operate in practice for personal representatives, pension scheme administrators, and beneficiaries, including outlining the proposed approach to information sharing and tax collection.
The note covers a lot of ground including:
- how notional pension property is identified and valued;
- who is responsible for reporting and paying any IHT due;
- the use of withholding notices and the pensions direct payment scheme; and
- how the reforms interact with existing income tax rules on pension death benefits.
The note also includes an indicative timetable of when further supporting guidance and materials can be expected.
Consultation on changes to the ‘Provision of Information’ regulations
The technical note was followed shortly afterwards, on 18 May 2026, by a technical consultation on draft changes to the information sharing regulations, consequential to the changes made by the Finance Act 2026 to bring certain unused pension and death benefits into a deceased person’s estate for IHT purposes.
Almost all the draft amendments are to The Registered Pension Schemes (Provision of Information) Regulations 2006 (SI 2006/567). These include the provision of certain information by personal representatives and scheme administrators of registered pension schemes to each other, as well as with pension beneficiaries and HMRC, in respect of the deceased’s pension assets.
The consultation will close on 11 June 2026.
HMRC Pension schemes newsletter 181
HM Revenue & Customs (HMRC) has published its Pension schemes newsletter 181 for May 2026. Amongst other things, the newsletter includes:
Notification of the withdrawal of the pension schemes online service
This informs that the pension schemes online service will close, stating that the service will no longer be available from April 2027.
Open pension schemes which have not yet completed migration to the managing pension schemes service are encouraged to do so by 31 December 2026 to lessen the potential disruption due to any future service limitations before it is withdrawn.
Inheritance tax on pensions
The newsletter mentions the recently published technical note regarding the upcoming IHT changes which will take effect from April 2027 and the consultation on the draft changes to the information sharing regulations.
ICO blog on new data complaints process
The Information Commissioner's Office (ICO) published a blog on 19 May 2026 about the new data protection complaints process requirements in force from 19 June 2026 under the Data (Use and Access) Act 2025.
The blog signposts ICO’s previously published guidance and provides a very high-level summary of what data controllers must do to comply with the new law.
FRC guidance on Virgin Media remedy
The Financial Reporting Council (FRC) published finalised guidance on 22 May 2026 which aims to support dealing with historic amendments in terms of providing, where required, the retrospective actuarial confirmation to validate historic changes to pension scheme rules in certain circumstances.
This refines guidance originally published in draft earlier in 2026 to ensure clarity and alignment with the final enacted legislation under Pension Schemes Act 2026.
PASA new and updated guidance
The Pensions Administration Standards Association (PASA) has published new and updated guidance during June 2024 in several of the areas its working groups cover.
Data Presence vs Accuracy
The PASA Data Working Group continues to produce content regularly and has published new guidance on ‘Data Presence vs Accuracy’. The main part of the guidance focuses on what trustees can do to improve data accuracy, suggesting trustees conduct an audit of data quality to identify potential issues in their data and areas of weakness, and on reviewing the data accuracy, carry out data remediation work as necessary. The guidance also suggests that consideration is given to ongoing monitoring on a periodic basis to help ‘future proof’ data accuracy.
Master trust transitions guidance
The PASA Master Trust Working Group has published updated guidance on master trust transitions following on from the original version issued in November 2019.
The updated guidance accounts for developments in the master trust space in the intervening years and is designed for situations involving transitions of savers to and from master trusts, focusing on the two most common scenarios:
- master trust to master trust; and
- single employer trust to master trust.
As well as industry developments, other topics covered include transition planning and suggested project governance, and communications.
TPR updates
The Pensions Regulator (TPR) continues to provide the industry with content including, among other things:
Corporate strategy consultation
TPR published a consultation on 11 May 2026 seeking feedback on a draft version of its corporate strategy for how it seeks to navigate the next five years in the context of a changing pensions landscape. This was touched on in a speech delivered by Chief Executive, Nausicaa Delfas, on 6 May 2026 outlining TPR’s vision for the next decade.
The consultation will close on 8 June 2026.
TPR’s ‘AI plan’ to clarify expectations for responsible use of AI in workplace pensions
TPR has published an AI plan on 20 May 2026 to clarify its initial expectations for the responsible use and governance of artificial intelligence (AI) in workplace pensions, urging safe and responsible adoption of AI in members' interests, and touching on some of the opportunities and threats.
DWP – combining small pension pots
The Department for Work and Pensions (DWP) announced on 24 April 2025 plans to bring eligible small pension pots together under reforms to be included in the Pension Schemes Bill, as part of the Government’s Plan for Change. It follows the findings of the work conducted by the Small Pots Delivery Group aimed at supporting the design and implementation of the new small pots multiple consolidator scheme approach, The aim of the initiative is to:
- automatically combine the number of eligible small pots of £1000 or less into one pension scheme that is certified as delivering good value to savers. Individuals will retain the right to choose their own consolidator scheme or opt out;
- help workers keep track of their pensions and get a better rate of return on these retirement savings by reducing the number of flat rate charges paid from their multiple small funds; and
- save businesses millions in unnecessary costs involved with administering an increasing number of small funds, as a result of Automatic Enrolment.
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