The Pension Schemes Act 2026 became law on 29 April 2026, just under a year after its initial publication in Parliament.

It represents a major structural reform of the UK pensions landscape and aims to:

• Improve saver outcomes

   

• Drive consolidation and scale

   

• Support UK investment

The legislation seeks to achieve these aims by effecting targeted changes to defined benefit (DB) schemes, defined contribution (DC) schemes, the pension protection levies and the Local Government Pension Scheme (LGPS).

Standing up for members

Since the draft legislation (known as a Bill) was tabled in Parliament in June last year, the Trustee and Railpen have been working hard to engage with policymakers and decision-makers on key areas, to ensure the Act is fit for purpose in advancing retirement outcomes while encouraging economic growth.

Our engagement both before the publication of the Bill and throughout its parliamentary passage resulted in several key outcomes:

• Pension Protection Fund (PPF) levy flexibility: because of certain provisions that were set out in the first draft of the Bill, for the first time the PPF has announced that it will not charge a levy for both 2025/2026 and 2026/2027, which will save millions for the schemes and enable lower contributions for many members and employers from April this year.

   

• Defined benefit (DB) surplus reforms: we’ve helped secure more flexibility for DB funds when releasing surplus payments to members, which could simplify surplus treatment and improve pension outcomes for employers and members.

   

• Exemption from defined contribution (DC) minimum scale requirements: we’ve received reassurance that the government intends for the Railways Pension Scheme’s Industry Wide Defined Contribution (IWDC) to be exempt from DC minimum scale requirements. This is good news for the RPS as it means the IWDC can continue to operate for the long-term, without forced consolidation. We will continue to engage with government to ensure that ensuing regulations are unequivocal in this respect.

   

• Constrained Government powers to intervene in DC pension schemes investment: after considerable parliamentary debate, the Government’s mandation reserve power – to direct pension fund assets into the UK – has been watered down significantly since the Bill was first tabled. Provisions now rightly recognise that fiduciary duty and member outcomes must remain paramount over mandation.

Railpen analysis: good news for savers

Overall, we welcome the objectives of the Act, and believe some of the changes it introduces are good news for savers.

In particular, we were very pleased with the amendments made to the Bill that constrained the proposed mandation reserve power, which had been a contentious point of debate throughout the Bill’s lifecycle. Like many industry experts, we were extremely concerned with the proposed power, which would essentially have allowed the Government to mandate DC pension scheme investment in specific assets, such as UK infrastructure or UK private markets. Throughout parliamentary scrutiny, Government insisted that it was a power designed to help drive UK investment and boost economic growth. However, we are against mandation in principle and were therefore concerned by the precedent set by including any such power in the Bill.

That’s why we welcomed the many concessions on the reserve power made by Government, which essentially introduce more guardrails to protect Trustees’ fiduciary duty and prioritise member outcomes.

The Act enables vital reforms that could mean real life benefits for many savers, making their pensions go further and helping them save towards a healthy and happy retirement.

What’s next

As the Act moves into implementation, our constructive engagement with Government will continue, through engagement with the various consultations on regulations that will follow, as well as on more specific areas such as the future of the PPF's risk-based levy.

All our work is underpinned by our purpose to secure our members’ future. We look forward to continued engagement with policymakers and the wider industry to support reforms that prioritise member outcomes, value for money and make the UK a better place to invest.