Disputes and litigation

Pensions law and the running of pension schemes can be a complex area. The combination of complex black-letter law and layers of regulation combined with a fragile economic climate and widespread pension fund deficits has produced a environment prone to mistakes, blame and litigation.

The requirement for schemes to have a formal internal dispute resolution procedure encourages the resolution of disputes internally before consideration of external, independent forums such as the Pensions Ombudsman and the courts, which have a long backlog of pending cases. However, in some instances, recourse to the courts is unavoidable and necessary.

For further information on the Pensions Ombudsman, see Practice Notes: Making a complaint to the Pensions Ombudsman—what is involved? and The Pensions Ombudsman—when should he be used and what are his powers?

Dealing with and compromise of pension scheme disputes

Disputes in relation to a pension schemes can take various forms. Depending on the type of scheme in question and the relevant facts, they can be potentially pursued through a number of different avenues. For further information on the various ways in which pensions disputes may arise in respect of occupational

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Joint regulatory VFM proposals aim to improve transparency and comparability in DC pension schemes

The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) have published a joint regulatory consultation and consultation response in CP26/1 setting out how a new value for money (VFM) framework could operate consistently across defined contribution (DC) workplace pensions. The proposals are designed to move the industry away from narrow cost-based assessments and towards a more holistic and comparable evaluation of the value delivered to pension savers in both trust-based and contract-based schemes. The proposed framework is intended to enable trustees, providers and governance bodies to assess the long-term performance of DC pension schemes for savers, improving transparency and competition by making it clearer which schemes deliver good value, and which do not, and supporting better retirement outcomes. The FCA has also published its response to feedback on its earlier consultation CP24/16 and the new consultation on revised detailed rules and guidance for contract-based schemes are to be implemented through the FCA Handbook. For trust-based schemes, where the Department for Work and Pensions (DWP) will legislate for the framework through the Pension Schemes Bill currently before Parliament, CP26/1 serves as discussion paper intended to gather timely input from the industry to help shape the detailed regulations and guidance that DWP and TPR are set to develop. The deadline for responding to consultation CP26/1 is 8 March 2026.

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