As the pensions industry prepares for the wide-ranging impact of the Pension Schemes Bill, Rachel Croft, chair of the Association of Professional Pension Trustees (APPT), looks at what this means for regulation and governance.
If the past few years have taught pension scheme trustees anything, it is that change is now part of business as usual.
The year(s) ahead look set to be defined by the implementation of updated UK pensions policy: translating an ambitious reform agenda into real-world improvements for scheme members, sponsors and potentially wider stakeholders. The overall aim is – hopefully – a sensible, workable operating environment for schemes that is fit for meeting today’s challenges and those of the future.
At the centre of this is the Pension Schemes Bill, now progressing through parliament, alongside the government’s Workplace Pensions Roadmap, setting the direction over the coming years.
A busy pensions agenda
The bill’s priorities are clear: scale, value and better retirement outcomes. For the defined contribution sector, that means moving towards fewer, larger arrangements – including a minimum scale expectation for auto-enrolment master trusts and group personal pension providers, with a headline target of £25bn in default assets by 2030 (or a pathway to get there).
It also means accelerating action on the small pots problem, with plans to consolidate dormant pots initially worth £1,000 or less into authorised consolidators, reducing frictional cost and helping members keep track of their savings.
The bill also places duties on schemes to offer default retirement pathways – ambitious guided solutions designed to help members convert savings into an income - encompassing the proposed Value for Money framework.
For defined benefit (DB) pension scheme trustees, the agenda is just as significant. The government is looking to introduce greater flexibility to release DB surplus, with safeguards, and to create a permanent legislative framework for superfunds.
At the same time, trustees are bedding in the Pensions Regulator’s new DB funding code, which originated in the previous environment where most schemes had significant deficits to address. This is now re-orientated to include expectations around long-term planning, covenant assessment and evidencing strategy.
A more demanding landscape
All of this lands on trustee boards that are already navigating a more demanding risk landscape. Other priorities include data and dashboards readiness, and operational resilience, including increased awareness, mitigation and monitoring of cyber risk.
Additionally, there are more complex investment propositions, including the consideration of investing for wider purposes, with the expectation that statutory guidance on fiduciary duty may clarify and better enable this where appropriate. Many boards must also contend with endgame decisions and heightened member communications expectations.
The trustee role has never been more central – nor more scrutinised.
In this environment, the case for accredited professional trustees becomes even stronger. As schemes face heavier regulatory expectations, more complex investment and endgame options, and greater operational and risks, including cyber, trustees need both the technical knowledge and the capacity to drive forward the agenda and govern the management of a complex set of risks.
Accredited professional trustees can bring independence and an objective external view where competing pressures need careful balancing. They also provide continuity when trustee board membership changes, projects run over multiple years, and scheme sponsors undergo change.
Just as importantly, accredited professional trustees lift board effectiveness by supporting lay trustees, strengthening constructive challenge, and enabling the delivery of the best possible outcomes, while ensuring governance remains effective and proportionate along the way.
Trusteeship looks set to remain a rewarding and challenging role over the course of 2026 and beyond. The APPT looks forward to continuing the dialogue with its membership, government, the Pensions Regulator and key stakeholders over the coming months with a view to continuing to enhance standards of trusteeship and governance for the benefit of scheme members and sponsors.
Rachel Croft is chair of the Association of Professional Pension Trustees.
