Pensions Update - September 2025

If (like me) you’ve missed a good chunk of pensions updates over the Summer break – this article is for you. Below are various updates from pension providers, advisers, and government with summaries on the contents and links to the main stories if you want to read more.

USS

USS has confirmed the publication of the August 2025 FRS102 i-Letter, which reflects the latest available information in respect of the funding position of USS, for use in financial statements. It is accompanied by the 'Annex A' Sep 25 disclosure note. Note the 0.2 changes to the mortality table, not considered to be material to the disclosure.

July 2025 Update from USS including:

• Annual Report & Accounts: USS publishes latest financial reports - the defined benefit section has a £10.1 billion surplus and assets outperform liabilities by 14.1% annually over five years. Member contributions decreased to 6.1%, employer contributions to 14.5%, and benefits returned to pre-2022 levels. USS serves nearly 577,000 members with an opt-out rate of about 10%, the lowest ever. Investment costs remain significantly below peers.
• Funding Updates: USS reports a sustained funding surplus after years of deficits, signalling stability ahead of the 2026 actuarial valuation. Employers are encouraged to engage with USS and related bodies as the valuation approaches. The scheme will continue quarterly monitoring and funding updates.
• USS’s Task Force on Climate-related Financial Disclosures report shows a 51% drop in portfolio emissions intensity from 2019 to 2024, exceeding interim targets. However, leadership stresses global emissions have not declined accordingly, urging broader coordinated climate action.
• Interim report on Conditional Indexation, a joint initiative exploring benefit design changes aimed at improving member outcomes and stabilizing contributions. The review includes benchmarking, modelling, and design principles, with a second report expected later in the year.
• The annual Institutions’ Meeting will be held online on 7 October 2025.

USS response: Pension Schemes Bill Call for Evidence looked at key areas and sought Ministerial assurances rather than any specific legislative changes.

TPS

• Running a benchmarking survey for TPS members.
• Update on the progression of RSS adjustments – TPS estimates 90 day wait from date choice made to any potential payment and potentially longer due to high volume of responses
• Confirmation (if you haven’t already seen), that TPS administration moves from Capita to Tata Consultancy Services in 2026

LGPS

The LGPC Bulletin 267 (August 2025) provides key updates for LGPS stakeholders, including:

• SPPA Circulars 03/2025 and 04/2025 covering flexible retirement guidance and the increase of normal minimum pension age from 55 to 57 starting April 2028 in Scotland.
• Prudential updates on simplifying AVC payroll submissions, training availability, and a firmer approach to payroll query management from January 2026.
• New Pensions Administration Standards Association (PASA) guidance ‘Securing Tomorrow’ on protecting member data and improving cyber resilience for pension schemes.
• HMRC updates including the extension of mandatory scheme pays deadline for public service pensions and a new Lifetime Allowance protections lookup beta service.
• Introduction of a spreadsheet to standardise gathering previous LGPS membership data for McCloud remedy implementation.
• Progress and webinars related to pensions dashboards, emphasising the need for data quality and scheme readiness ahead of the October 2025 connect-by deadline.
• SAB updates including response to Access and Fairness consultations, Code of Transparency revisions, and the upcoming Board Annual Assembly on 22 October 2025.
• Diversity and peer support survey for LGPS administering authorities with a September 2025 deadline.

SAUL

SAUL has been promoting the purchase of additional pension units to its members. It has also been accepted as a signatory for the Financial Reporting Council’s UK Stewardship Code for the fourth consecutive year.

They issued this statement setting out their investment strategy, combining good returns for members with responsible investment. Following recommendations from their Working Group, they will ensure no investment in tobacco producers or controversial weapons manufacturers.

Government

Call for evidence

The Government’s Call for Evidence to support an independent report on the State Pension age was issued on 18 August reviewing:

• how the State Pension age is set and the key factors the government should weigh for future decades, including whether to link it to life expectancy and how best to ensure the long-term sustainability of the State Pension.
• international models, especially Automatic Adjustment Mechanisms that adjust pension ages in response to demographic or economic changes.

Should you wish to respond, you have until 24 October.

Pension Scheme Newsletter – August

The latest HMRC pensions newsletter highlights updates to personal pension relief claims, public service pension remedy deadlines, and operational processes for scheme administrators as of 21 August 2025. Including:

• Personal Pension Relief - Evidence and Process Changes - From 1 September 2025, the evidence threshold is lowered for higher/additional rate tax relief requests via tax code, meaning some claimants will now need to provide supporting documentation even when it was not previously required; Telephone claims are no longer accepted; all requests for Personal Pension Relief must be made online or by letter.

• Public Service Pension Remedy - Scheme Pays Deadline - the deadline has been extended to 6 July 2027, covering both active and deferred members retroactively for tax years 2019–20 to 2022–23 where the previous deadline was missed.

• Relief at Source - Returns and Claims - Annual returns for 2024–25 remain outstanding for some scheme administrators; further interim repayments will be withheld until complete returns and declarations (APSS590) are received; Scheme administrators are reminded to use correct file naming conventions to avoid rejected submissions; and pension schemes submitting consolidated claims now require individual relief at source references for 2026–27 and onward; updates will follow in future newsletters.

Financial Conduct Authority

The FCA's issued this report on life insurers' pension transfer processes, focusing on service standards, timescales, and consumer outcomes for Defined Contribution personal pension transfers.

First Actuarial

• Briefing on unused pension and death benefits for IHT – explaining these unused benefits will be subject to Inheritance Tax from April 2027
• Briefing for Quarter 3 2025 - including a look at the turbulent financial markets, the Pension Schemes Bill, the future of pensions (government proposals), guidance from The Pensions Regulator and the latest in the risk transfer market
• Risk transfer briefing – looking at member experience in risk transfer projects
• Gilt Market update – concluding that diversified gilts remain a good investment for DB schemes  

Pensions Policy Institute

• Reviews the impact of the Turner Commission 20 years on.