Pensions update - April 2025

This update covers:

• TPS: contribution changes, year end process, splitting members service on April submissions, and slides from the recent TPS Action Forum
• LGPS: annual update (pay ranges and contributions, pension limits, NIC changes, annual revaluation order, redundancy), March's monthly bulletin (tightening rules on mid-valuation cycle, National LGPS Framework for Transition Management Services, BCE/RBCE statements, technical guidance on pensions in payment, McCloud scope, pensions dashboard) and Scottish LGPS advisory board bulletin
• USS: private market usage, reflections on 50 years
• SAUL: increase in April 1.7%, rules whilst on parental leave, SAUL payments to be aligned with CPI up to 5%
• UK Pensions Ombudsman: NHS Pension Scheme in trouble for statement commitments 
• Pensions Policy Institute: webinar on Assessing UK Retirement Income Market
• HMRC: updates for the new tax year (rates/allowances, OPS/ROPS in EEA meeting same conditions as schemes for rest of the world, using Managing pension schemes service for returns), and latest newsletter (returns, drawdown pension tables from 1 Sept 2025, OPS/ROPS above, deadlines to certain lifetime allowance protections)

Teachers’ Pension Scheme (TPS)

The policy paper from the Department for Education, Teachers’ Pension Scheme: reasons for changes to the member contribution rates 2025 sits alongside the Teachers’ Pension Scheme (Amendment) Regulations 2025, in accordance with the Public Service Pensions Act 2013. The paper is a requirement where changes to member contribution rates (a protected element) is introduced. The estimated yield from the 2020 Scheme Valuation (concluded in 2023) was 9.45%, falling short of the 9.6% requirement, hence the need to make changes to member contribution rates to ensure an average yield met the 9.6%.

Over on the TPS website:

• Recommendations to Get ready for the End of Year Certificate process as the contributions cash figure will be posted to your mailbox by the end of April
• Confirmation that emails have been sent out regarding completing April submissions to remind recipients to split member’s service across two lines
• Provide a copy of the slides from the Teachers’ Pensions Action Forum on 11 and 20 March, covering
  • An update from the Teachers’ Pension
  • Employer Secure Messaging
  • Retirement Process & Options

Local Government Pension Scheme (LGPS)

LGPS March Bulletins

If you haven’t already seen it, the LGPC's Annual Update (March 2025) has been published and includes:

• Pay ranges and employee contribution rates for England and Wales
• Average contribution rates for Scotland
• From 1 April, additional pension limits increased to £8,903 (England & Wales) and £8,568 (Scotland)
• For 2025/26, there are no changes to annual allowance limits (£60,000 standard), Lump Sum Allowance (£268,275), Lump Sum Death Benefits Allowance (£1,073,100), automatic enrolment earnings trigger (£10,000)
• NIC changes
• 7% increase to annual revaluation order, annual pensions increase, annual guaranteed minimum pension
• Redundancy payments increase from £700 to £719 per week

The LGPS standard monthly bulletin for March 2025 includes:

• Government plans to tighten the rules on mid-valuation cycle reviews of employer contribution rates (England and Wales)
• Tiered contribution guidance and average member contribution rates (Scotland)
• Details of the National LGPS Framework for Transition Management Services which went live in March 2025 (if you want to read more, there’s also the LGPS framework press release)
• Annual BCE and RBCE statements – what to include on the statements for BCE members
• Member newsletter from Prudential on tax reliefs, plus their new customer support hub
• Improved and updated technical guidance on increasing pensions in payment
• Identifying members in scope of McCloud protection and using the NIDB
• How to prepare for the pensions dashboard connection (due October 2025)
• Training programme
• Update from the England & Wales Scheme Advisory Board
• Links to HMRC’s pension schemes newsletters
• Updated TPR pension scams leaflet

The Scottish LGPS scheme advisory board has also published its bulletin summarising discussions from their Feb 2025 meeting.

Universities Superannuation Scheme (USS)

USS has published an article discussing their use of private markets where they highlight The People’s Partnership Achieving Critical Mass paper, which holds up USS as a case study for private markets expertise. The article is, essentially, a cheerleading exercise by USS (and good for them!) and it’s also a good little summary of the investment portfolio.

USS reflects on 50 years in this article from David Watts (UCU appointed non-exec of USS).

SAUL

On the SAUL website there are articles on:

• Confirmation that SAUL pensions are increasing in April by 1.7% and members will receive a letter before the next pension payment on 24 April.
• Explanation of the pension rules whilst a member is on parental leave – this is a good reminder of the continued payments required by employers, however, it doesn’t mention the interaction with statutory payments for the employee’s 6% contribution on their pay whilst on leave.
• Confirmation that SAUL payments will increase in line with CPI, up to 5% - an increase from 2.5% cap as a result of a positive ‘health-check’ valuation.

UK Pensions Ombudsman

UK Pensions Ombudsman has criticised the NHS Pension Scheme administrator for failing to deliver a member with pension savings statements even though their website claimed the statements would be delivered automatically. Pinsent Masons have the full details here however it is worth noting that these statements are not a legislative requirement, but because the administrator had committed to providing it to members exceeding the annual allowance, the ombudsman found it was maladministration to break this commitment.

Pensions Policy Institute

PPI are hosting a webinar on Assessing the UK Retirement Income Market, taking place on 29 April.

Latest HMRC updates

Pension schemes rates and allowances for 2025/26

From 6 April 2025 Overseas Pension Scheme (OPS) and Recognised Overseas Pension Scheme (ROPS) established in the European Economic Area (EEA) must meet the same conditions as those schemes established in the rest of the world. As a result, a number of HMRC guidance documents have been updated, including:

• Overseas pensions: stop being a QROPS
• Overseas pensions: set up your scheme for migrant member relief
• Check the recognised overseas pension schemes notification list
• Overseas pensions: tell HMRC you’re a qualified recognised overseas pension scheme

The guidance documents, Send pension scheme reports, Information requirements for pension schemes, Submit a pension scheme return using the Managing pension schemes service and Pension schemes online user guide were updated to confirm that:

• from the 2024 to 2025 tax year, the Managing pension schemes service is used to submit your return, and ‘0’ PTSR numbers will also need to migrate over; and
• For the 2023 to 2024 tax year and earlier, you must use the Pension schemes online serviceto submit any new pension scheme returns.

You can also catch up with their latest newsletter – from March 2025 discussing:

• Pension scheme administrators receiving a notice to file a PSR will need to submit on the Managing pension schemes service – make sure you give yourself enough time. It also mentions the ‘0’ PTSR migration (above) as well as more detailed information about making the return
• Publication of the drawdown pension tables on 27 March to apply from 1 September 2025
• Ensuring OPS and ROPS are aligned (again, see above)
• Reminder of the deadlines to certain lifetime allowance protections