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PENSION ADMINISTRATION TECHNICAL HELP
PATHways 183
Highlighting pensions news and legislation that has
particular relevance to what we do in pension administration
In this edition of PATHways, we cover:
- HMRC newsletter 180
- Pension Schemes Act 2026
- PASA guidance
- Pensions salary sacrifice cap legislation
- Pensions dashboards
Bhavna Baines contributed to the writing of this newsletter.
HMRC newsletter 180
HM Revenue & Customs (HMRC) has published its Pension schemes newsletter 180 for April 2026. Amongst other things, the newsletter includes:
Pension Scheme return
Confirmation that if a notice to file is issued for the 2025/2026 tax year, some details may be pre populated where a return was filed for the previous year. Also, previous returns submitted via the Managing pension schemes (MPS) service can be viewed and searched by tax year or by using an individual member’s details. Returns for the 2023/2024 tax year or earlier must be submitted via the pension schemes online service, and third party software can no longer be used.
Lifetime allowance protections and enhancements
A reminder that the previous unauthenticated lookup route is no longer available and access to verify such protections must be through the MPS service. An email address is provided to request support if there are issues viewing a member’s protections or enhancements.
Pensions schemes migration to the Managing pension schemes service
If pension scheme administrators have not signed into the MPS service within the last three years, access will be blocked and enrolment details must be recovered by following the instructions provided, before migration can proceed. Where a scheme has wound up, this must be reported via an event report on the Pension schemes online service if the wind up date falls in or before the 2022/2023 tax year, or via the MPS service for the 2023/2024 tax year onwards.
Normal minimum pension age – transitional regulations for scheme benefit payments
Information on the expected transitional provisions in relation to the increase in the normal minimum pension age to 57 from April 2028 is provided. The transitional arrangements are intended, subject to scheme rules, to prevent disruption to certain pension benefit payments for members who became entitled to the payment of those benefits before 6 April 2028, when between the age 55-57. For example, where a member was aged 55 or 56 on 5 April 2028 and had already become entitled to a scheme pension and the payment of a pension commencement lump sum, those payments may continue as authorised payments if paid on or after 6 April 2028.
Pension Schemes Act 2026
The Pension Schemes Act 2026 gained Royal Assent on 29 April 2026. Many provisions will require secondary legislation to provide further information before coming into force. The Department for Work and Pensions (DWP) has committed to issue a revised roadmap, setting out the planned timetable for reform setting out indicative timelines for DC and DB reforms, which remains subject to change.
As covered in previous publications, key DB related measures include a potential remedy for schemes impacted by the Virgin Media case, powers to enable relevant schemes to have greater flexibility over the use of any surplus, as well as PPF reforms. Some of the DC measures for impacted schemes include, automatic consolidation of certain small pots, new ‘default’ guided retirement duties, as well as a new value for money framework.
PASA guidance
Operational challenges of default retirement
The Pensions Administration Standards Association (PASA) has published guidance on the operational challenges of introducing default retirement solutions for impacted schemes, highlighting that new guided retirement duties will significantly reshape DC administration. It calls on administrators to act now by reviewing system readiness, engaging with trustees, considering delivery models and strengthening communications, warning that without early collaboration, operational constraints could limit what can be delivered in practice.
Contingent spouse pension data and calculation approaches
PASA has also published new guidance on contingent spouse pension (CSP) construction, such as for surviving spouses or civil partners, highlighting the critical importance of data quality in achieving accurate and reliable outcomes. The guidance offers schemes a practical framework for assessing, calculating and maintaining CSP values, and explores key data, governance and calculation considerations to help balance accuracy, cost and operational efficiency.
Pensions salary sacrifice cap legislation
The National Insurance Contributions (Employer Pensions Contributions) Act 2026 gained Royal Assent on 29 April 2026, introducing a framework to cap National Insurance Contribution (NIC) exemptions on pensions salary sacrifice from 6 April 2029. The cap will initially be £2,000 for the 2029/2030 tax year, with salary sacrificed pension contributions above this subject to employer and employee NICs.
Employer pension contributions outside salary sacrifice will continue to be free of NICs, and all pension contributions will remain exempt from income tax (subject to the usual limits). Further detail will be set out in future regulations, with guidance expected ahead of implementation.
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.
Pensions dashboards
The Pensions Regulator (TPR) has updated its breach reporting guidance, including a traffic light system (red, amber, green) to help assess when breaches should be reported. It includes dashboard specific examples relating to the timely provision of value data (member’s accrued and projected pension values), with strict timescales depending on when a statement was last provided to the member. New “green” examples cover minor, short term data issues and testing phase breaches. Reporting remains dependent on whether a breach is materially significant, considering its cause, impact and wider implications.
TPR has also published its latest market oversight report, summarising engagement with large schemes on their readiness for pensions dashboards and published two checklists to support scheme readiness. In a blog, TPR dashboards lead Lucy Stone highlights that connection is only the first step and urges schemes to maintain momentum, focus on value data and learn from user testing.
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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