UK Government updates implementation roadmap for major pension reforms

The most significant change is to the implementation dates for guided retirement, which have been pushed back by two years. This is, in part, to align the introduction of guided retirement with the roll-out of Retirement CDC (R-CDC). 

The government has also announced it will phase-in the new value for money (VfM) regime.  This will remove the threat of automatic consequences from the first set of results for larger schemes and give smaller schemes more time to prepare.

The updated roadmap also provides more details on the implementation timelines for the new surplus powers for DB schemes and the new scale thresholds for DC master trusts and group personal pension plans (GPPs). It also confirms that trustees can expect guidance on their fiduciary duties in the context of investment decisions early next year.

Alongside the revised roadmap, the government published a number of consultation and discussion papers. We highlight these below and summarise the impact of the revised roadmap on the timelines for the major DB and DC reforms that are coming down the tracks. 

DB reforms

The government says it continues to work “at pace” with the Pensions Regulator (TPR) on the implementation of the new rules on release of surplus and the new statutory superfunds regime.

Surplus powers and flexibilities

The government is consulting on draft regulations setting out the revised conditions that must be met before surplus can be released from a DB scheme while it is ongoing. The consultation on the draft Occupational Pension Schemes (Payments to Employer) Regulations 2027 closes on 2 September 2026. 

The new statutory powers and surplus regulations are due to come into force on 6 April 2027, alongside changes to the pensions tax legislation to enable direct lump sum surplus payments to members (details of which were also published yesterday). 

TPR also plans to consult on supporting guidance later this year. 

Superfunds

While the government anticipates that the full DB superfunds regime will still come into force in 2028, this has been pushed back from spring 2028 to winter 2028.  

The government intends to consult on implementing regulations in early 2027. Allowing more time before consulting is intended to create space to learn from TPR's interim regime and react to market developments. TPR is also set to consult on a new code in relation to DB superfunds in the second half of 2027, with both the regulations and the code due to come into force by October 2028. 

DC reforms

The roadmap confirms the implementation timetables for six major reforms that will affect DC schemes.

Guided retirement

The new guided retirement framework will ensure that the vast majority of DC savers are offered a suitable retirement income solution designed to provide a sustainable retirement income, without the individual needing to make complex financial decisions. The government published a policy paper setting out the key principles that will underpin guided retirement yesterday and it plans to consult on its proposed approach in Autumn 2026 ahead of further consultations on draft regulations and the draft FCA rules in the second half of 2027. 

Significantly, the timetable for implementing guided retirement has been pushed back by two years with:

• DC Master Trusts and FCA-regulated workplace schemes now expected to implement guided retirement by mid-2029, and
• own-trust DC schemes due to do so by mid-2030

The government has indicated that schemes that plan to use RCDC as a default retirement solution will also be given until mid-2030 to comply.

Retirement CDC

As expected, the government is planning to introduce legislation to enable R-CDC arrangements to be established in the UK. R-CDC will provide an additional retirement option for DC savers, where their scheme offers it.

The government has confirmed it will consult on draft R-CDC regulations in October 2026. Regulations are expected to be laid and TPR will consult on changes to its code in the second half of 2027.

The R-CDC legislation and code are expected to come into force in late 2028, with schemes and providers being able to apply for authorisation from that point. The government estimates that the first R-CDC schemes could be authorised by mid-2029.

The guided retirement and R-CDC timelines are interrelated, and the government is considering a targeted, time-limited extension for schemes committed to pursuing R-CDC as a default retirement solution, to allow them time to establish their R-CDC arrangement before they are required to implement guided retirement. 

Value for Money

As expected, the government has confirmed that the first assessments under the new VfM regime will take place in 2028, based on 2027 data. However, in response to industry feedback, it has indicated there will now be a phased approach to implementation.

In the first year, only larger schemes — such as DC Master Trusts, large single employer trusts (more than 50,000 active and deferred members), and non-bespoke multi-employer contract-based arrangements open to new employers will be required to complete VfM assessments. Significantly, the government has also said it will not apply automatic consequences on the basis of the outcomes of assessments in the first year. However, the first assessment reports and data are due to be published in October 2028.

Smaller schemes will only be required to complete data returns in 2028 and their data will not be published, with full assessments due to start in 2029.

The government also confirmed that it wants to extend the new VfM regime to pensions in the decumulation phase in due course, once it is satisfied the new regime and guided retirement are working effectively. It said the priority would be ensuring default pensions used for guided retirement purposes provide fair value, as they are likely to be made available to the majority of savers.

A consultation on draft regulations and draft FCA rules relating to the new Value for Money framework is now underway.

Scale requirements

As expected, DC master trusts and GPPs used for automatic enrolment will be required to have assets of at least £25 billion in their main scale default arrangement (MSDA) from April 2030. Schemes with between £10bn and £25bn of assets in their MSDA will be able to apply to enter the transition pathway, with applications due to open during 2029.

Schemes that do not achieve this scale (or are not approved for transition pathway relief) will be protected for a set period so that an orderly transition to a new scheme can be managed.

The DWP has published a discussion paper to seek industry views on key elements of the Scale Policy as it develops the detailed design for regulations. Consultation on those regulations is expected to take place in Autumn/Winter 2027, with consultations on TPR’s code and FCA’s guidance due to take place in 2028.

Small Pots consolidation

Following the Small Pots Digital Systems Feasibility Review, the government has started further work to inform final decisions on the digital infrastructure required to implement its small pots solution. Delivery timelines remain indicative and subject to change – a more definitive timetable will be published when the government consults on next steps this Autumn.

This first phase of consultation will focus on the framework for establishing default consolidator schemes and the underlying infrastructure. A subsequent consultation will look at the roles and responsibilities of ceding schemes and this will be followed by consultations on draft regulations in 2028 and 2029.

Small pots consolidation itself is not expected to begin until April 2030.

Contractual override

The contractual override provisions for contract-based arrangements, which will enable providers to transfer members from arrangements that are not providing value to those that are, are “on track” to be introduced in Spring 2028.  However, the government says it is continuing to work through the interaction between DC scale, VfM and the contractual override so the plans set out in the roadmap are a “best estimate” at this point in time.

The next phase of reform

In recent months, it has become clear that some of the indicative timelines set by the government back in June 2025 were going to be pushed back. It is helpful to have the updated roadmap, which reflects the government's current expectations, and is designed to provide the industry with sufficient certainty for business planning and scheme development.

Aligning the introduction of guided retirement with the roll-out of R-CDC is significant.  It will enable R-CDC to be part of the first wave of guided retirement solutions that schemes implement and signals the government’s support for this new retirement option. DC schemes and providers will also welcome the government’s decision to phase-in the new VfM regime. 

On the DB side, many employers and trustee boards are exploring how they might make use of the new surplus powers from next April. The introduction of the statutory superfunds regime should also support the expansion of that market, which will continue to operate under TPR’s interim regime until the new statutory regime comes into force.

The government published a number of consultations and discussion papers alongside the updated roadmap. So there is a lot for the industry to digest. The Pensions Commission is also expected to report in early 2027, with recommendations feeding into the next phase of reform. The Minister has indicated that the government “will swiftly turn their recommendations into action”. Therefore, it appears there will be no let-up for UK schemes and providers.