“Latest news on 4th of July, we have heard through HPPA members that at least one amendment may be revealed on Monday at the second reading of Bill 255. Here’s is a message for you to consider sending to your MP.
I imagine you may be thinking – ”Another one? Really?”.
My reply is – “Yes. This is the best opportunity for change that we have had in more than 20 years.” The choice is yours. We have sent ours. Kind regards, Patricia & David
MP Briefing paper – HPPA suggested Amendments to the Pension Schemes Bill 255
July 4 2025
1. Summary
HPPA view Bill 255 as written is biased in favour of the sponsoring company.
Amendments are required to ensure that pension scheme beneficiaries are considered for an equitable share of any fund surplus, not just the sponsoring company. Trustees need to be enabled to have statutory powers to improve member benefits, as well as to release surplus funds to the sponsoring company.
2. The Proposed Amendments
Clause 8A: Trustee power to amend rules for member benefit improvements
This would grant trustees the same statutory power to amend scheme rules to improve member benefits, including discretionary increases, as they will have to allow payment of surplus to employers, ensuring parity and fairness
Clause 8B: Fairness assessment prior to surplus extraction
This would require trustees to assess and document fairness across all member groups before authorising any employer surplus payment, supported by actuarial input and Regulator guidance
Clause 8C: Strategy and policy for pensions and discretionary benefits
This would require trustees and sponsors to develop and maintain a strategy and policy for pensions and other benefits, including use of surplus and discretionary increases, as part of existing legal duties and with guidance from The Pensions Regulator. This would be in line with improved pension scheme governance objectives under the 2021 Pensions Act.
3. Further context and comment about the use of surplus and the suggested Amendments
· Any scheme surplus would be generated by investment of past employee contributions plus contractual employer contributions, it would be grossly unfair to deny benefit to beneficiaries
· Hundreds of thousands of pensioners have experienced real-term erosion in benefits (up to 70%) particularly those with no indexation related to inflation and minimal discretionary increases, this Bill could be an opportunity to rectify this in future
· The same principles would apply to PPF and FAS schemes
· In many schemes trustees are currently legally unable to act, even where surplus exists and actuarial funding is robust
· Clauses 8A, 8B and 8C together would ensure that trustees can act in fairness. They do not mandate outcomes or override scheme independence.
The HPPA have prepared detailed clauses for each proposed amendment with supporting rationale.
We will submit these following the debate on Monday for submission into the next Committee stage.
