BUFDG Pensions Update - April 2026

Welcome to our pensions newsletter, summarising everything (we know!) from higher education pension scheme updates, general pensions updates that are useful to the sector, and ending with what you’ve all been posting about. Please email us if we are missing anything.

USS

USS issued their latest update on 2 April, highlighting:

• Still in a strong funding position despite the volatile markets – the discussion document around the 2026 valuation (issued in January) “remains appropriate”
• Likelihood of inflationary pressures in the long-term which will be reflected upon for the 2026 valuation
• General commentary on their investment strategy, seeking to engage with members throughout the valuation exercise to ensure what they “believe is in the best financial interests of members and their beneficiaries”.

LGPS

News

The pensions minister, Torsten Bell, promised a review of contribution rules within LGPS, despite MPs voting against House of Lords amendments to change how triennial valuations in the LGPS are handled. Whilst the majority of universities within the LGPS will see slight employer contribution reductions, this will be of most relevance for those of you with Barnet Waddingham acting as actuaries, he expressed concerns around “excessive prudence” in LGPS valuations and the effect this has on employer contribution rates.

Pensions Expert reports South Yorkshire cuts employer contributions (average 13%) after funding level rises to 142%.

Survivor benefits

The government has published guidance on survival benefits rules in the LGPS.

LGPS QAPA calculator

LGPS has published the QAPA calculator for members to use who wish to buy any pension ‘lost’ in an authorised period of unpaid leave of more than 14 days starting 1 April 2026 onwards.

LGPC Bulletin

The LGPC Bulletin for March (published 1 April) includes the following areas:

• England and Wales - enactment of phase one of the "Access and Fairness" consultation, new statutory guidance regarding survivor benefits and death grants. Confirms extension of LGPS membership to elected members of local authorities in England (effective 11 May 2026), updates to Annual Allowance guidance, including revised dates for calculations and the removal of references to withdrawn Lifetime Allowance guidance.
• Scotland - key Scottish updates include the publication of SPPA Circulars 2026/02 and 2026/03, which cover tiered contribution guidance, average employee contribution rates for 2026/27, and a 3.8% increase for deferred pensions and pensions in payment from 6 April 2026. Additionally, updated GAD guidance on flexible retirement takes immediate effect.

• Pensions Dashboards: Progress on the second phase of consumer testing for the MoneyHelper Pensions Dashboard (MHPD), including a toolkit for member communications, the extension of the reporting standards consultation to 30 April 2026, and an explanation of the three pension status categories (Confirmed, Pending, and Needs Action).
• Finance and Payroll: Updates to the Prudential AVC payroll submission process, which now requires a specific format, and details on the Finance Act 2026, including the extension of HM Treasury powers regarding the abolition of the Lifetime Allowance and new Inheritance Tax rules for pensions.
• Fraud and Compliance: Increased focus on impersonation fraud, including updated PSAG leaflets for transfer correspondence, recommendations for robust identity verification, and TPO’s update on its Operating Model Review (OMR), which includes a new "Lead Case" approach for handling complaints.
• Tools and Training: Updates to member calculators on both England/Wales and Scotland websites for the 2026/27 year, and a full calendar of 2026 training courses, including modules on aggregation, tax allowances, survivor benefits, and employer roles.

TPS

Northumbria University v UCU

Northumbria’s pension reform is a response to unsustainable TPS costs, offering a choice between TPS and USS, a reward model that other post-92 universities will want to watch closely. Their HEPI article sets out why the university believes change is needed now, how rising pension costs are affecting sustainability, and what its proposed approach could mean for other institutions facing similar pressures. Read the full piece for a concise but thought-provoking view on one university’s response to a growing sector challenge.

Andy Long, Northmbria’s vice-chancellor and chief executive, penned this article on THE to explain the move. Then rebutted by UCU who argue that staff are being nudged into switching through financial disincentives and potential reduced protections (around ill-health retirement) for those employees who do switch. Don’t forget to read the comments sections, where Northumbria rebut the rebuttal, stating that retirement for ill-health will be fully supported by the University.

This had followed an article from UCU urging ministers to protect the TPS (institutions are setting up subsidiaries to break the link to requiring TPS) by supporting universities in the same way that schools and colleges are. The University of Chichester is the latest institution to announce employing staff through a subsidiary to reduce pension costs.

SAUL

• SAUL celebrates its 50-year anniversary
• Shared policy updates, including 1) raise minimum level of female representation from 33% to 40%, 2) clarified their expectations of companies on climate change, and 3) accountability for companies restricting shareholder rights

HMRC

New tax year

HMRC has published updates to various guidance documents to reflect new rates, thresholds, allowances, etc for the 2026/27 tax year, including:

• Pension schemes rates and allowances
• Check pension scheme member’s annual allowance – updated tax years pension scheme members can carry forward an annual allowance

UCEA

• Reminder that UCEA are seeking applications for a non-executive director to join the USS board (one of four UCEA-appointed directors)

General

• PPI are looking for participants to respond to their 2026 Lost Pensions Survey
• Emma Douglas confirmed as new chair of the Pensions Regulator
• House of Commons published a research briefing on the taxation of the State Pension as MPs look at the effect of the personal tax allowance freeze on those individuals with only a small amount of tax to pay from their basic/new State Pension
• Access First Actuarial’s Pension Cost Accounting webinar held on 15 April
• ICAS warns the government that the £2,000 cap for salary sacrifice is “short-sighted tax policy”
• First Actuarial’s Bulletin’s latest email reports on The Health Foundation’s news that healthy life expectancy in the UK fell to 61 (a 2-year drop) according to their figures

External Events

First Actuarial - Key issues for pension cost accounting – What employers need to know, Wednesday 15 April at 10.00am

Hopefully you’ve already signed up, but UCEA is holding The Future of HE Pensions conference on Tuesday, 28 April – we’ll look forward to hearing about it.