On 27 April 2026, the Pension Schemes Bill continued its ping-pong, passing through both Houses of Parliament. It started in the Commons, which approved a further set of amendments to the reserve power on asset allocation in response to earlier concerns. However, these changes did not satisfy the House of Lords, which again rejected the reserve power in its amended form later that day. The Lords argued that the measure undermines trustees’ fiduciary duties by steering them towards government-directed investment decisions rather than acting solely in members’ best interests, placing trustees in a ‘double bind’ between potential legal liability and regulatory sanction. They also criticised the policy as procedurally and constitutionally flawed, pointing to the lack of proper consultation and an overreliance on coercion—using the threat of the reserve power and deauthorisation to influence behaviour rather than relying on clear, properly scrutinised legislation. In addition, they considered the measure disproportionate and unjustified, citing interference with members’ property rights, excessive penalties, and reliance on unproven assumptions about investment outcomes, alongside insufficient improvements to the safeguards in the savers’ interest test.

Following “ping pong” on 22 April 2026, the Pension Schemes Bill remained unresolved between the two Houses. Earlier that day, the House of Commons rejected a series of House of Lords amendments, including those removing the asset allocation reserve power and introducing exemptions from scale requirements, and instead proposed amendments in lieu. The Bill was returned to the House of Lords later the same day for consideration of those Commons amendments. However,  while agreement has been reached on several aspects of the Bill in the Lords, the asset allocation provisions remain in dispute. The Bill therefore remains in ping pong and has been returned to the House of Commons for further consideration, with the next stage scheduled for 27 April 2026.

Law360: The Pensions Regulator (TPR) has said it will look to other regulators and governance standards for guidance to ensure that pensions trusteeship is ready for the 'transformational' impact of reforms that have recently been announced.

By the end of the seventh day of House of Lords Grand Committee debate on the Pension Schemes Bill held on 5 February 2026, the government successfully secured the agreement of the House to its full package of technical amendments relating to pre-1997 indexation for the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS).  However, the government’s major structural amendment relating to the introduction of a new public sector AWE pension scheme was withdrawn in response to concerns raised during the debate, and no replacement amendment was brought forward on the day. The Grand Committee is currently scheduled to sit again on 23 February 2026 and 3 March 2026 to examine the remaining provisions of the Pension Schemes Bill.

At the third day of Grand Committee on the Pension Schemes Bill on 19 January 2026, the House of Lords undertook an extensive examination of Clauses 9 (Power to modify scheme to allow for payment of surplus to employer) and 10 (Restrictions on exercise of power to pay surplus), with debate focused on a series of amendments that tested how far the new surplus release regime should be constrained in primary legislation. In particular, peers tabled amendments seeking to change the terminology from ‘surplus’ to ‘assets’, to require surplus to be shared with members, to mandate benefit enhancements including inflation protection, to strengthen member notification or consultation (including trade union involvement) in the surplus release process, to constrain the Secretary of State’s regulation-making powers, to embed actuarial and endgame requirements in statute, and to alter insolvency priorities where employers had previously extracted surplus. The government response, delivered principally by Baroness Sherlock, consistently resisted the amendments to prescriptive statutory rules governing the use of surplus or the processes surrounding its release, and instead defended the Bill’s reliance on trustee discretion, fiduciary duties, actuarial certification, and regulatory oversight by the Pensions Regulator.  All amendments were either withdrawn or not moved following government opposition, and Clauses 9 and 10 were agreed without amendment.

Law360: The Financial Conduct Authority (FCA) warned the House of Commons Public Bill Committee (Committee) on 2 September 2025 that the government's Pensions Schemes Bill requires secondary legislation to clarify how trustees can safely refuse any government direction on how to invest funds in UK private markets.

Law360: The government has proposed new rules for former contracted-out salary related occupational pension schemes that experts say could offer a way out of the legal limbo they've faced since the Court of Appeal Virgin Media judgment in July 2024.

Pensions analysis: On the fourth day of Grand Committee on the Pension Schemes Bill on 22 January 2026, the House of Lords (HoL) undertook an extensive examination of the value for money (VfM) regime, small pots consolidation, scheme scale requirements and the reserve power to mandate asset allocation. Day 4 confirmed the government’s clear legislative strategy: broad enabling powers in primary legislation, with legal substance deferred to regulations, consultations and guidance. Despite extensive probing from peers on fiduciary duty, proportionality, market impact and member protection, no changes were made to the Bill. All Clauses examined were agreed, leaving the key legal risks and safeguards to be resolved at the time secondary legislation is debated in Parliament.

Law360: The government's plan to limit a controversial measure designed to mandate pension funds to make certain investments is a 'positive step', the Pensions Management Institute and Society of Pension Professionals have said.

Law360: Parliament has been urged to back amendments to the Pension Schemes Bill to extend indexation to pre-1997 pensionable service for members receiving compensation through the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS).

Pensions analysis: Day 5 of Lords Grand Committee scrutiny of the Pension Schemes Bill focused mainly on Clause 40, covering scale requirements, default arrangements and reserve asset-allocation powers for defined contribution schemes. Peers challenged the government’s emphasis on consolidation, the £25bn threshold and the proposed mandation powers, while the government defended the approach as improving saver outcomes with mandation being a backstop only. No non-government amendments were agreed and one minor government technical amendment was accepted. Debate on other amendments were adjourned and will resume in subsequent Committee sittings, currently scheduled for 3 and 5 February 2026.

The House of Lords Grand Committee (Grand Committee) completed its sixth day of scrutiny of the Pension Schemes Bill on 3 February 2026, agreeing Clauses 40 to 96 without amendment. All opposition and non-government amendments were either withdrawn or not moved, and the government suffered no defeats, including on the most controversial provision, Clause 40, which introduces reserve powers allowing ministers to mandate minimum asset allocations in defined contribution default funds. Further stages of the Grand Committee are scheduled for 5 and 23 February and 3 March 2026.