Phil Brown: Success will depend on coordination and delivery capacity as much as on the final wording of regulations
The latest of Pensions UK’s regular columns says that, while the Pension Schemes Bill is now entering its final phase, the bulk of the work to enact reform is only just beginning.
When the Pension Schemes Bill receives Royal Assent later this year, it may feel like a milestone for UK pensions policy. In reality, it will mark the start of a demanding phase of secondary legislation, consultations, regulatory rules and guidance that will determine how – and how well – reform actually lands.
The Bill is intentionally enabling. Its ambition on scale, consolidation, value for money and retirement outcomes depends on regulations still to be written and implemented. For schemes, providers and advisers, the challenge will be keeping pace with what follows.
A crowded legislative pipeline
The Department for Work and Pensions' indicative roadmap points to a heavy consultation programme starting shortly after Royal Assent, with implementation of many measures stretching to 2030.
The first wave is expected to focus on defined contribution (DC) scale and consolidation. Regulations will need to define what counts towards the £25bn ‘main scale default arrangement' and how connected defaults can be aggregated. Parallel Financial Conduct Authority rule‑making for contract‑based schemes adds complexity for providers operating across both regimes.
Alongside this, the government is expected to consult on regulations underpinning the new Value for Money (VfM) framework for trust‑based DC schemes. The key issue is not the metrics but the consequences of underperformance: how assessments are scored and published, and how and when The Pensions Regulator (TPR) can intervene, including forcing consolidation or closure.
Further consultations will follow on contractual override, small pots consolidation, defined benefit (DB) surplus extraction, a permanent statutory framework for DB superfunds, and new duties around DC decumulation and guided retirement. Collectively, this is one of the most intensive periods of pension reform in decades.
Sequencing matters
Getting the order wrong could blunt the intended impact of the reform package. Reforms should be phased so that the foundations come first: clarify the end‑state for the VfM framework (including the consequences of underperformance) and the definition of scale, then allow schemes and providers time to respond through orderly consolidation and investment strategy changes.
Only once scale and VfM are bedded in should the system move at pace on reforms that are operationally complex or heavily member‑facing, such as small pots consolidation and the new decumulation and guided retirement duties.
Finally, measures affecting DB schemes – including a permanent superfund regime and any changes to surplus extraction – should follow with appropriate safeguards, informed by the market and regulatory capacity that will be built through earlier stages.
Timeframes that compress decision‑making
Although many requirements will not formally take effect until later in the decade, the practical lead‑in time is much shorter. Providers considering their scale position, trustees assessing future VfM ratings, and employers reviewing scheme sustainability may need to make strategic decisions before regulations are finalised.
This creates a familiar but uncomfortable dynamic: the industry must engage with consultations while planning for outcomes that remain uncertain. Early movers risk misalignment with final rules; late movers risk being overtaken by consolidation timetables and regulatory pressure.
Operational stretch and resource risk
The pace of change also raises questions about operational capacity. Trustees, administrators, regulators and advisers are being asked to absorb multiple technically dense reforms at once, many interacting with existing programmes such as pensions dashboards, data improvement and cyber resilience.
Smaller schemes and providers may struggle to engage fully with successive consultations while maintaining day‑to‑day service. Even larger organisations face sequencing challenges: investment strategy redesign may be needed before VfM metrics are final, and decumulation solutions may need to be scoped before member behaviour is fully understood.
There is also a risk that policy intent outpaces delivery reality. Small pots consolidation, for example, relies on data quality, transfer processes and member communications that the industry has historically struggled to standardise. Without careful phasing, operational strain could undermine outcomes in the short term even as reforms aim to improve them over the long term.
An extended period of regulatory scrutiny
One clear implication of the post‑Bill phase is that regulatory scrutiny will intensify rather than diminish. Consultations will be followed by guidance, supervisory expectations and, eventually, enforcement. The Pensions Regulator has already signalled a more assertive approach on value, scale and governance, and schemes and providers will need a coherent narrative on how they deliver value, manage scale and support members across accumulation and retirement.
Royal Assent will confirm that reform is not optional. The years that follow will test whether the industry can adapt at speed without losing sight of member outcomes. Success will depend on coordination and delivery capacity as much as on the final wording of regulations.
In that sense, the Pension Schemes Bill is not the end of the story. It is the framework for a sustained period of delivery – one in which the pace of change may prove as challenging as its direction.
Phil Brown is head of DC and master trusts at Pensions UK
