​​​​​​​XPS Group reacts to landmark agreement on Pension Schemes Bill

​​​​​​​XPS Group reacts to landmark agreement on Pension Schemes Bill

29 Apr 2026

XPS Group, a leading UK consulting and administration business specialising in the pensions and insurance sectors, has today welcomed the Pension Schemes Bill clearing its final hurdle, saying the focus must now shift to implementation and the detailed regulations that will determine how the reforms work in practice.

Following extensive debate between the Houses, the content of the Bill has been agreed, and it will become an Act before the King’s Speech on 13 May 2026. The Bill has been dubbed by commentators as a ‘once in a generation’ shift in how retirement wealth is managed in the UK, with key developments for both defined benefit (DB) and defined contribution (DC) schemes.

For DB schemes, XPS has said the new powers around use of surplus provide substantial potential benefits for scheme members and sponsors, and the superfund provisions expand the strategic options for schemes. In the DC space, XPS added the move to scale and the value for money framework should help shift the focus to value, not cost, supporting improved outcomes for pension savers.

Commenting on the DC provisions, Sophia Singleton, Head of DC at XPS Group, said: “It is fantastic that the Bill has made it through both Houses, as it provides much-needed focus on how DC savers access their savings in retirement and improving outcomes through a value-orientated approach. We had concerns about the reserve power, but we’re pleased to see practical compromises ensuring that it is brought into line with the Mansion House Accord and redefining the exemption clause. We now need both the Government and industry to focus on delivering what was agreed to unlock value and improve outcomes for millions of savers. Do that, and DC defaults will likely get to the private market allocations that mandation aims to achieve. Looking ahead, there are still a lot of clarifications to come through follow-up regulations, and the next few years will be busy for DC arrangements as we implement guided retirement and the value for money framework.”  

Commenting on the DB surplus provisions, Tom Froggett, Head of DB Run-On at XPS Group, said: “It is welcome to see the Bill agreed, moving us to the next step, and we fully support the Government’s policy intent of allowing well-funded DB schemes to use surplus to benefit members and employers, with appropriate guardrails in place. However, attention will now quickly turn to the finer points of detail in the upcoming consultations from DWP and TPR, which will look at key elements such as the threshold for releasing surplus, the practicalities of adopting the new statutory override to release surplus, and the regulatory guidance for trustees. It will be crucial for the new surplus regime to strike the right balance between giving trustees a clear blueprint for running on, whilst retaining sufficient flexibility for trustees and employers to negotiate an appropriate surplus-sharing strategy based on the individual circumstances of each scheme.”

Commenting on the superfund provisions, Patrick Lloyd, Head of Alternative Risk Settlement at XPS Group, said: “The legislation will help firm up the foundations for the DB superfund market in the UK. Clara Pensions has just completed its fifth transaction, but with more clarity around the legislation now in place, there are several potential new superfund providers looking to establish themselves and compete with Clara. All of this will help to cement superfunds as a realistic alternative to buyout and run-on, and in particular, will provide another option for schemes where covenant is weak but buyout is out of reach.”

Commenting on the covenant implications, Arabella Slinger, Head of Covenant at XPS Group, said: “The strength of the covenant remains an important consideration when determining the longer term strategy for schemes, particularly as surplus sharing, superfund transactions and other solutions become more accessible. In balancing a given company’s objectives and achieving the optimal outcome for members, trustees and sponsors should assess the relative merits of the options available, taking into account covenant strength, resilience and longevity, when establishing the endgame strategy of schemes.”