A Christmas wishlist for the pensions industry

Pensions Expert asked representatives of 21 organisations from across the UK retirement industry to come up with one ‘Christmas wish’ – something they would like to see over the next 12 months.

From a smooth passage for the Pension Schemes Bill to collective defined contribution (CDC) schemes becoming a reality, from defined benefit (DB) endgames to the Pensions Commission, it’s fair to say that our list to Santa is a long one.

• DB surplus and endgame options
• The Pensions Commission and adequacy
• The Pension Schemes Bill
• Some festive respite
• Climate change and sustainability
• Collaboration

DB surplus and endgame options

Alison Fleming, pensions partner at PwC: “It is difficult to choose just one thing! We are looking forward to seeing more details of how the promised surplus extraction regime for defined benefit schemes will work. This has the potential to benefit members and corporate sponsors in making available surpluses that have grown to record levels in many cases.”

Alastair Greenlees, head of investment strategy UK at Van Lanschot Kempen: “Whisper it, but we are already seeing a key wish list item: the growth of alternative endgames. When schemes buy out with an insurer, the announcement is usually high-profile, though when schemes choose to run on for members and sponsor, it is usually quieter – the recent Stagecoach announcement is a rare exception. If there was more noise across the industry when schemes choose to run on, it might bring a little more festive cheer and confidence to those making decisions.”

Stephen Richards, partner at Stephenson Harwood: “We would like to see the return of surplus question being addressed in its proper legal context, which is neither starting from the point of bargaining for further benefits for members nor an insistence on buyout at all costs. Rather, we would like to see the industry focus first on what is the correct thing to do, which is to ensure existing pension benefits are paid. That could be buyout, run-on or something else. And we are excited by some of the innovative options out there.”

The Pensions Commission and adequacy

Maggie Rodger, co-chair of the Association of Member-Nominated Trustees: “That the Pensions Commission and other discussions and developments lead pensions scheme members to better understand the value of pensions. And for each £1 contributed to produce the best long-term return for members to improve pensions adequacy generally.”

Tess Page, UK wealth strategy leader at Mercer: “The industry will be watching activity from the Pensions Commission closely. We’d like to see recommendations which improve member outcomes, address adequacy gaps and inequalities, and build a system which is fair for all, and crucially for them to be implemented as quickly as possible.”

“The Pensions Commission’s first report will be an important opportunity to map the problems that result in inadequate pensions.”

Jayesh Patel, Legal & General

Jayesh Patel, head of UK DC distribution at Legal & General (L&G): “On the top of L&G’s Christmas wishlist for the pensions industry is real progress towards pension adequacy for members. The Pensions Commission’s first report, expected in the spring, will be an important opportunity to map the problems that result in inadequate pensions.

“A significant step towards addressing this would be expanding auto-enrolment, via a phased approach, which will broaden pension participation, creating a larger channel of capital for investment in the UK economy alongside more secure retirements for members.”

Ronan O’Riordan, head of UK and Ireland business development at Schroders: “It is becoming clearer that, for many people, looking after themselves and their loved ones through their working life, and into retirement, is about much more than pensions.

“Even when you take pensions freedoms into account, the UK’s long-term savings system is unusually inflexible. We think this provides an excellent opportunity to develop a model that catapults us to a framework that is right for the UK and leads the world as a model of best practice.”

Kelly Parsons, head of DC proposition at Broadstone: “At the top of my Christmas wish list is meaningful progress in closing the gender pension gap and empowering women to take control of their financial futures. Women still retire with significantly less pension wealth than men, often due to career breaks, part-time work and lower lifetime earnings.

“Targeted financial education is crucial to help women understand pensions, savings and investments so they feel confident making decisions. The introduction of financial education in schools from 2027 is a major step forward and should help future generations approach long-term planning with more confidence.”

Stuart Arnold, senior DC pensions consultant at WTW: “It will be important for all appropriate options to be available for pension providers and trustees to design the right solution for savers. To that end, at the top of our wishlist is the industry’s recent call for retirement CDC regulations to be accelerated to align with guided retirement duties. This will support providers and trustees in making appropriate decisions, but most importantly, ensure the right solutions are available to pension savers.”

The Pension Schemes Bill

David Saunders, senior partner at Sackers: “Like a Christmas tree swathed in an excess of tinsel and lights, over the years, pensions have become wrapped up in numerous layers of intertwined legislation and regulation, which can make it difficult to see clearly where one obligation begins and another ends. With the Pension Schemes Bill poised to deliver sweeping changes from now until 2030, top of my wishlist would be that the government and regulators aim to keep the flow of changes steady and avoid as far as possible over-egging the pudding.”

A spokesperson for the Pension Protection Fund (PPF) said: “Top of the PPF’s Christmas wishlist is a smooth passage for the Pension Schemes Bill into royal assent so that we can deliver the reforms in it that will help us better protect our members and lift unnecessary costs for levy payers.”

Some festive respite

Sophia Singleton, president of the Society of Pension Professionals: “The industry has a huge volume of change to contend with in the coming years – scale, value for money, dashboards, guided retirement, targeted support, pot consolidation, restrictions to salary sacrifice, the introduction of inheritance tax on unused pension pots and more, much more. Our Christmas wish would be to ensure these changes are implemented effectively with nothing more on top of what’s already planned in the short to medium term.”

Sonya Fraser, partner at Arc Pensions Law: “A genuine cross-party commitment to stop tinkering with the pensions tax regime. Constant fiscal adjustments have eroded public trust and made saving into a pension scheme feel uncertain and opaque.

“If we are serious about addressing issues around retirement adequacy, then savers need to have confidence that the rules won’t change every Budget and that the goalposts will actually stay put. We need stability and a system that people can rely on for 30-plus years, not just for the next fiscal cycle. A cross-party pledge of pensions tax consistency would be a very welcome Christmas gift, acknowledging we are probably more likely to see pigs fly!”

Barry Jones, chief investment officer at Isio: “The pensions industry is in a strong position. DB schemes now have meaningful endgame choices that can benefit both members and sponsors, and the increasing capacity in the insurance market is a real positive. In DC, consolidation is progressing and should lead to better investment arrangements that support members over the long term. The wish for the industry is simple: a proper festive break, and a refreshed start to 2026 with everyone ready to continue delivering the best outcomes for scheme members.”

Kirsty Ross, proposition director at People’s Partnership, provider of the People’s Pension: “This year has been a momentous year for pensions, and 2026 is looking to be a bumper year as well. With the workshop running at full capacity to deliver everything from last year’s list, we’re looking for a peaceful time – just mince pies and mulled wine on the agenda.”

Richard Knight, partner and head of pensions at Burges Salmon: “After this year’s plethora of pensions legislation ‘gifts’, and with a raft of secondary legislation imminent, a period of relative calm would be welcome, to give schemes time and resource to implement the changes.

“Failing that, a clear long-term trajectory, with a plan to address the adequacy conundrum, a flight path to get there and cross-party support to ensure policy continuity would be top of the list.”

Climate change and sustainability

The Universities Superannuation Scheme (USS) recently published a report with Transition Risk Exeter calling for stronger action from governments, improved management of climate risks and opportunities from asset owners, and a more collaborative approach to managing these challenges.

Simon Pilcher, chief executive of USS Investment Management: “Reducing portfolio emissions alone will not solve the problem. Real-world emissions continue to rise while those of our own portfolio are falling. Asset owners must collaborate and engage with policymakers to accelerate real-world change. If the real world doesn’t transition, the long-term returns we need to pay pensions could be impacted.”

Naomi Clark, head of investment product management at USS Investment Management: “Much more needs to be done, and quickly, to slow down or reverse the rise in global temperatures. We all have a part to play – pension funds, investors, policymakers and regulators alike. With the right policies and investor action, the energy transition could deliver trillions in savings and create a more resilient economy. Strong government policy is essential to unlock the full potential of clean technologies.”

Collaboration

Rachel Elwell, chief executive officer at Border to Coast Pensions Partnership: “We know we are stronger when we work together, and indeed, collaboration is part of the DNA of the Local Government Pension Scheme (LGPS). I’d like to see that spirit of collaboration in action across the entire investment ecosystem. Asset owners, managers, government (both central and local), and public finance institutions working together to develop the investment opportunities that deliver the ‘win-win-win’ of strong, sustainable returns and positive social and economic benefits across the UK, for the benefit of LGPS members, local employers, and the wider community.”