TRW & Co · Employment, Pensions & Immigration
Pensions Lawyers in London
UK pensions law is changing faster than at any time in a decade. Our pensions lawyers London clients instruct advise employers, trustees and investors on DB funding and end-game options, the Pension Schemes Act 2026, Pensions Regulator powers, transactions and disputes, and the 2027 inheritance tax changes that will affect members' estates.
Key pointThe Pension Schemes Act 2026 is largely a framework: DB surplus release, DC scale and value for money depend on regulations still to come, so sponsors and trustees should plan around what is live today while preparing governance and data for what follows.
At a glance
New Act now law
The Pension Schemes Act 2026 received Royal Assent on 29 April 2026, covering DB surplus, Virgin Media remediation, DC scale, superfunds and small pots.
Moral hazard reaches groups
TPR contribution notices and financial support directions can reach connected and associated persons, including overseas parents of UK employers.
Criminal offences apply
Sections 58A and 58B of the Pensions Act 2004 create offences of avoiding employer debt and conduct risking accrued scheme benefits.
Dashboards deadline is here
TPR states all in-scope schemes must be connected to pensions dashboards by 31 October 2026 at the latest.
Pensions enter IHT in 2027
The Finance Act 2026 brings most unused pension funds and death benefits within inheritance tax for deaths on or after 6 April 2027.
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What pensions law covers in the UK
Pensions law governs how workplace pension schemes are set up, funded, run and wound up, and how the risks they carry are shared between employers, trustees and members. The pensions lawyers London boards, trustees and investors instruct deal with defined benefit (DB) funding and de-risking, defined contribution (DC) governance, the pensions angle of corporate transactions and restructurings, regulatory investigations, and disputes with members.
The subject matters because pension liabilities can be among the largest on an employer's balance sheet and among the least flexible. A DB deficit can affect a company's ability to pay dividends, refinance or sell a business. On the DC side, employers carry statutory duties to enrol workers and pay contributions, and trustees carry fiduciary and regulatory obligations that are growing in scope.
Who is affected
Almost every UK employer is affected through automatic enrolment. Sponsors of DB schemes, including many overseas-owned groups with legacy UK schemes, face funding and regulatory risk. Trustees, independent trustee firms, insurers, buyers, lenders and private equity funds all encounter pensions issues, as do executives and families planning for retirement and inheritance.
When it becomes a legal question
Pensions issues become urgent at predictable moments: a triennial valuation, a corporate transaction, a refinancing or dividend, an insolvency process, a buy-in or buy-out, a discovery that historic scheme amendments may be invalid, or a regulator's letter. Early advice at those points is usually cheaper than fixing the problem later.
The legal and regulatory framework
Occupational pension schemes are usually established under trust, so trust law and the scheme's trust deed and rules sit at the core. Statute overlays them. The Pension Schemes Act 1993, the Pensions Act 1995 and the Pensions Act 2004 set out the main framework for funding, member protection, employer debt and regulatory powers, and the Pensions Act 2008 introduced automatic enrolment.
The Pensions Regulator (TPR) regulates workplace schemes. Its general code of practice, in force in Great Britain since 28 March 2024, consolidated earlier codes and sets expectations on governance, investment, administration and reporting. Contract-based schemes, such as group personal pensions, are regulated by the FCA. The Pension Protection Fund pays compensation to members of eligible DB schemes whose employers become insolvent, and the Pensions Ombudsman resolves complaints and disputes as a free, independent service.
Moral hazard powers and criminal offences
TPR can issue a contribution notice under section 38 of the Pensions Act 2004, requiring a person to pay money into a scheme where acts or failures to act have avoided or reduced an employer debt or otherwise met a statutory test. It can also issue financial support directions under section 43 where an employer is a service company or insufficiently resourced. These powers can reach persons connected or associated with the employer, including parent companies and, in some cases, individuals.
The Pension Schemes Act 2021 added criminal offences to the 2004 Act, including the offence in section 58A of avoiding an employer debt and the offence in section 58B of conduct risking accrued scheme benefits. These offences are broad, and directors and lenders should consider them before any transaction that could weaken a DB scheme's position.
Employer debt
Under section 75 of the Pensions Act 1995, an employer debt can be triggered in a DB scheme when an employer becomes insolvent, the scheme winds up, or, in multi-employer schemes, when an employer ceases to participate. The debt is calculated on a buy-out basis, which is usually far more expensive than the ongoing funding basis. Restructurings and group reorganisations therefore need careful planning, using the arrangements the regulations allow.
The Pension Schemes Act 2026 and other 2026–27 reforms
The Pension Schemes Act 2026 received Royal Assent on 29 April 2026. It is a framework Act: much of its effect depends on regulations to be made over the coming years. Pensions lawyers London trustees and sponsors rely on are tracking each measure. Our overview of the Pension Schemes Act reforms sets out the detail.
- DB surplus. A new statutory framework allows schemes, subject to safeguards, to use surplus even where their rules would otherwise prevent it. The conditions are expected to be set by secondary legislation. See our guide to releasing DB surplus.
- Virgin Media remediation. Following the Court of Appeal's decision in Virgin Media Ltd v NTL Pension Trustees II Ltd, which held that certain amendments to contracted-out schemes made without actuarial confirmation were void, the Act provides a statutory process to validate affected amendments retrospectively, with actuarial input. Our article on Virgin Media and section 37 certificates explains the process.
- DC scale and value for money. Multi-employer DC schemes used for automatic enrolment face a scale requirement for their main default arrangements by 2030, and trust-based DC schemes will have to assess and publish value for money metrics.
- Consolidation. The Act introduces a regulatory regime for DB superfunds and a mechanism for consolidating small dormant DC pots into authorised consolidator schemes.
- Retirement income. Trustees of DC occupational schemes will be required to offer default pension benefit solutions at retirement.
Two further 2026 Acts matter to employers and members. The Finance Act 2026 brings most unused pension funds and death benefits into the scope of inheritance tax for deaths on or after 6 April 2027, with personal representatives responsible for reporting and paying; our guide to inheritance tax on pensions covers the new regime. And the National Insurance Contributions (Employer Pensions Contributions) Act 2026 makes amounts of salary sacrificed for employer pension contributions liable to National Insurance, with the detail set by regulations. Employers using salary sacrifice should model the effect now.
The Pension Schemes Act 2026 gives trustees and employers new options, but most of them arrive only when the regulations do. Good decisions now depend on knowing which measures are live and which are still promises.
Key decisions for DB sponsors and trustees: what pensions lawyers London clients weigh
Most mature DB schemes now face a choice of end-game: run on, insure, or consolidate. Improved funding levels have made those choices real for many schemes for the first time.
| Option | What it involves | Main advantages | Main risks |
|---|---|---|---|
| Run-on | Scheme continues with low-risk investment and employer support | Keeps upside and potential surplus use under the new framework | Continuing governance cost and employer exposure |
| Buy-in | Trustees buy an insurance policy as a scheme asset covering some or all members | Removes investment and longevity risk for the insured members | Data and benefit errors must be cleansed; illiquidity |
| Buy-out | Individual policies issued to members and the scheme wound up | Full transfer of liability from the employer | Highest cost; residual risk if benefits are wrongly specified |
| Superfund | Transfer to a consolidator with capital buffer instead of an insurer | Can be cheaper than buy-out for some schemes | Regulatory tests and gateway conditions; new regime still being implemented |
The funding regime frames the decision. TPR's DB funding guidance requires trustees to obtain a full actuarial valuation at least every three years, with an actuarial report in intervening years, and to set a funding and investment strategy targeting low dependency on the employer by the time the scheme reaches significant maturity. That strategy usually needs the employer's agreement, so sponsors should engage early. Our guide to buy-ins and buy-outs explains the insurance process.
Benefit and data cleansing
Before any insurance transaction, trustees should confirm that benefits are correctly specified under the rules as amended, including equalisation for guaranteed minimum pensions and the validity of historic amendments. Insurers price the benefits they are told about; errors that surface after buy-out can be difficult and expensive to correct.
Process and timeline: a pensions-sensitive corporate transaction
Pensions lawyers London buyers and sellers bring into a deal usually follow this sequence where a DB scheme is involved.
- Identify the schemes. Confirm which group companies participate in which schemes, whether any are DB, and whether any employer is leaving a multi-employer scheme.
- Assess the funding position. Review the latest valuation, recovery plan, funding and investment strategy, covenant assessments and the buy-out position, not only the accounting figure.
- Analyse moral hazard risk. Consider whether the deal could be materially detrimental to the scheme or weaken the employer covenant, triggering contribution notice or criminal offence risk.
- Engage the trustees. Where detriment is possible, discuss mitigation, such as security, guarantees or a contribution, before signing.
- Consider clearance and notifiable events. Decide whether to apply to TPR for clearance and check notifiable events duties for the employer and trustees.
- Allocate risk in the documents. Reflect the pensions position in price, warranties, indemnities and any completion conditions.
- Plan post-completion. Address section 75 debts, apportionment arrangements, transfer of employees and minimum pension provision after any TUPE transfer.
TPR's moral hazard powers can reach associated and connected persons, which can include overseas parent companies. The contribution notice test is not limited to deliberate avoidance: an act that materially reduces the value of the employer covenant can be enough. Record the board's consideration of the scheme's interests and any mitigation offered; that record is often the best defence if TPR later asks questions.
Documents and evidence to assemble
For trustees, employers and buyers, the core documents are:
- The definitive trust deed and rules and every subsequent amendment, with actuarial confirmations for contracted-out schemes.
- The latest actuarial valuation, schedule of contributions, recovery plan, statement of funding principles and funding and investment strategy.
- Covenant reviews, contingent asset documents, guarantees and any security granted to the scheme.
- Statements of investment principles, investment management agreements and any insurance policies.
- Member data, GMP equalisation records and administration reports, including any known benefit errors.
- Trustee minutes, the scheme's risk register and its own risk assessment under the general code.
- Correspondence with TPR, the PPF and the Pensions Ombudsman, including any notifiable events or breach reports.
- For DC arrangements, the default strategy, chair's statement, value for members assessments and automatic enrolment records.
Gaps in this record are common in older schemes. Pensions lawyers London trustees appoint will often start with a documentary audit, because the validity of the governing documents determines what benefits are owed, what powers exist and who holds them.
Risks and common mistakes
Assuming historic amendments are valid
The Virgin Media litigation showed that amendments to contracted-out benefits between 1997 and 2016 could be void if the required actuarial confirmation was not obtained. Many schemes cannot locate those confirmations. The Pension Schemes Act 2026 provides a statutory process to validate affected amendments, but it requires actuarial input and a formal decision. Trustees and sponsors preparing for buy-out, surplus use or a transaction should review amendment history now rather than discover a problem during an insurer's due diligence.
Treating dividends and refinancings as purely corporate decisions
Paying dividends, granting security to lenders or moving assets within a group can weaken the employer covenant. TPR expects trustees to be treated fairly relative to shareholders and creditors, and its moral hazard powers and the section 58A and 58B offences can apply to conduct that harms the scheme. Boards should consider the scheme's position, take advice on materiality and document their reasoning. Pensions lawyers London directors consult will usually recommend early engagement with trustees.
Missing pensions dashboards and administration duties
TPR's dashboards guidance states that all schemes in scope must be connected to pensions dashboards by 31 October 2026 at the latest. Connection depends on accurate member data and working matching processes. Alongside dashboards, the general code sets expectations on record-keeping, cyber controls and contribution monitoring. Administration failures are a common source of member complaints and Pensions Ombudsman determinations.
Getting automatic enrolment wrong
Employers must assess workers, enrol eligible jobholders, pay minimum contributions on time and re-enrol periodically. Errors often arise with variable-hours staff, salary sacrifice and payroll changes, and TPR can issue compliance notices and penalties. The new National Insurance treatment of salary sacrifice will make payroll design more important. Our guide to automatic enrolment duties sets out the employer obligations.
Overlooking pensions in employment and family matters
Pensions frequently arise outside pure pensions work: in settlement agreements, where accrued rights should be preserved; in TUPE transfers, where minimum pension provision may be required; in executive pay; and on divorce, where pension sharing or offsetting can be significant. Our guide to pensions on divorce covers the family law side. Treating pensions as an afterthought in these processes risks claims later.
Scotland and Northern Ireland
Most pensions legislation applies across Great Britain, and TPR regulates schemes in England, Wales and Scotland. Scots law governs trusts constituted under it, which can matter for scheme documentation and disputes. Northern Ireland has parallel pensions legislation, and the Pension Schemes Act 2026 contains distinct provisions for Northern Ireland schemes. TPR's general code came into force in Northern Ireland on 5 July 2024, later than in Great Britain.
Cross-border angle: Bangladesh, the EU, the Gulf and Asia
Many overseas groups own UK subsidiaries that sponsor legacy DB schemes. For a Bangladeshi, Gulf or Singaporean parent, the key point is that UK pensions risk does not stop at the subsidiary. TPR's powers can extend to connected and associated persons, and trustees will often ask for parent guarantees in valuations or transactions. Parent boards should understand that exposure before approving intra-group transactions, disposals or restructurings affecting the UK employer. Our restructuring team advises where the UK employer is under financial stress.
Internationally mobile executives raise different issues: whether to remain in UK schemes while abroad, the tax treatment of transfers overseas, and how the 2027 inheritance tax changes interact with their wider estate. We coordinate with our tax solicitors and colleagues in TRW's Dhaka, Dubai and Singapore offices where local law applies. Pensions lawyers London executives instruct should also consider employment and incentive arrangements in the round, with our share plans and incentives team.
How TRW & Co's pensions lawyers London clients instruct can help
TRW & Co's London office is authorised and regulated by the Solicitors Regulation Authority. We advise employers, trustees, investors and individuals on pensions as part of an integrated employment, corporate and tax practice. Where a pensions dispute needs advocacy in the higher courts, we instruct specialist counsel.
DB funding and end-game
We advise on valuations, funding and investment strategies, contingent assets and the legal steps for run-on, buy-in, buy-out or superfund transfer, including benefit specification and data cleansing.
Transactions and restructurings
We carry out pensions due diligence, assess moral hazard and criminal offence risk, negotiate with trustees and advise on clearance, alongside our M&A lawyers.
Pension Schemes Act 2026 implementation
We help trustees and sponsors plan for surplus use, Virgin Media remediation, DC scale and value for money requirements as regulations are made.
Trustee governance
We advise trustee boards on the general code, own risk assessments, conflicts, investment duties and responding to TPR enquiries.
Employer compliance
We advise on automatic enrolment, salary sacrifice, scheme changes and consultation, and the pensions aspects of TUPE transfers, with our employment law practice.
Disputes and complaints
We act in member complaints, Pensions Ombudsman determinations, rectification and construction claims, and disputes between employers and trustees.
See TRW & Co's full list of practices for related corporate, tax and private client work.
Checklist for boards and trustees
- Do we know our scheme's funding position on the ongoing, low dependency and buy-out bases, and the timetable to significant maturity?
- Have historic amendments been checked for validity, including actuarial confirmations for contracted-out benefits?
- Have we assessed which Pension Schemes Act 2026 measures are in force and which await regulations?
- Are dividends, security and group transactions assessed for their effect on the employer covenant, with decisions documented?
- Is the scheme connected to pensions dashboards and are member data and administration controls fit for purpose?
- Are automatic enrolment and salary sacrifice arrangements ready for the National Insurance changes?
- Have members and trustees been told about the inheritance tax changes from 6 April 2027?
- For overseas-owned groups, does the parent board understand its potential exposure to TPR's powers?
To discuss a pensions matter with our pensions lawyers London team, contact TRW & Co.
Frequently asked questions
01Can an employer now take surplus out of a DB scheme?
The Pension Schemes Act 2026 creates a statutory framework allowing schemes, subject to safeguards, to use surplus even where their rules would otherwise prevent it. However, the detailed conditions, such as funding thresholds and trustee decision-making requirements, are expected to be set out in regulations. Until they are in force, surplus extraction depends on the existing rules and statutory procedures. Trustees will remain the decision-makers and will expect the employer to show how members' security is protected.
02What does the Virgin Media case mean for our scheme?
In Virgin Media Ltd v NTL Pension Trustees II Ltd, the Court of Appeal held that certain amendments to contracted-out benefits made without the required actuarial confirmation were void. Schemes that were contracted out between 1997 and 2016 should review whether amendments affecting those benefits were properly confirmed. The Pension Schemes Act 2026 introduces a process allowing affected amendments to be validated retrospectively, with actuarial input. Trustees should identify any potentially affected amendments and decide whether to use that process.
03When should we apply to the Pensions Regulator for clearance?
Clearance is voluntary. It gives comfort that TPR will not use its contribution notice or financial support direction powers in relation to a specific event, based on the information provided. It is most often considered for transactions or restructurings that could be materially detrimental to a DB scheme, such as a change of control, significant security or a return of value. Many transactions proceed without clearance where mitigation is agreed with the trustees and the reasoning is documented.
04Can directors be personally liable for pension deficits?
Directors are not generally liable for a company's pension deficit as such. However, TPR's contribution notice powers can extend to individuals connected or associated with the employer, and the criminal offences in sections 58A and 58B of the Pensions Act 2004 can apply to any person whose conduct meets the statutory tests, subject to the reasonable excuse defence. Directors should therefore consider the scheme's interests when approving transactions and keep a clear record of their reasoning.
05How will inheritance tax on pensions work from 2027?
Under the Finance Act 2026, most unused pension funds and death benefits will be included in a person's estate for inheritance tax for deaths on or after 6 April 2027. Certain benefits, including death in service benefits and dependants' scheme pensions, are excluded. Personal representatives will be responsible for reporting and paying any tax, and can give withholding notices to scheme administrators. Members should review nominations and wider estate plans, and trustees should prepare processes for settling death benefits.
06What is the difference between a buy-in and a buy-out?
In a buy-in, the trustees buy a bulk annuity policy as a scheme asset, covering some or all members' benefits; the scheme continues and the trustees remain responsible to members. In a buy-out, the insurer issues individual policies to members, the scheme's liabilities transfer to the insurer and the scheme is usually wound up. A buy-in is often the first step towards a buy-out. Both require accurate data and correctly specified benefits.
07Do overseas parent companies face UK pensions exposure?
They can. TPR's contribution notice and financial support direction powers can be used against persons connected or associated with a scheme's employer, which can include parent companies outside the UK. Enforcement abroad may raise practical questions, but the risk affects how trustees, lenders and buyers view the group. Trustees often seek parent guarantees as part of funding negotiations. Parent boards should understand that exposure before approving transactions affecting the UK employer.
Sources and official materials
- Pension Schemes Act 2026 — DB surplus, Virgin Media remediation, DC scale and consolidation
- Pensions Act 2004, section 38 — Contribution notices
- Pensions Act 2004, section 58A — Offence of avoidance of employer debt
- The Pensions Regulator: code of practice — General code of practice for governing bodies
- The Pensions Regulator: DB scheme funding and investment — Valuations, funding and investment strategy, covenant
- Virgin Media Ltd v NTL Pension Trustees II Ltd [2024] EWCA Civ 843 — Court of Appeal on section 37 actuarial confirmation
- The Pensions Ombudsman — Free, independent resolution of pension complaints
- Pension Protection Fund — Compensation for members of eligible DB schemes
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.