October was relatively quiet for pensions, with the exception of the publication of a documents package expanding the Collective Defined Contribution (CDC) framework to unconnected multiple employers and pensioner only provision.
Read our in-depth insight for further information on how these new types of CDC arrangements will operate, including how retirement-only CDC will fit in with Defined Contribution (DC) trustees’ forthcoming Guided Retirement duty under the Pension Schemes Bill.
We also consider other pensions developments of note, including the latest on progress with The Pensions Ombudsman’s (TPO) Operating Model Review, a further TPO determination on transfers and pension scams and a progress update on the DC Mansion House Compact and the newly announced Sterling 20 initiative, both designed to increase investment in UK productive finance.
The Pensions Ombudsman (TPO)
TPO Operating Model Review blog – positive news on reducing caseload and waiting times
TPO’s Operating Model Review blog provides some positive news on progress with reducing caseloads and wait times. During the first half of 2025/26, case closures have increased by 14% compared to H1 2024/25 and although there has been a continued increase in demand for TPO’s services with new applications up by 6% compared to the same period last year, it is much lower than increases experienced during that time.
TPO notes that this is a “strong indicator that our work on limiting demand, such as putting in place a single ‘lead case’ instead of multiple complaints about the same scheme and insisting on formal internal dispute processes being exhausted prior to an application being made to us, is bearing fruit.” It means that TPO’s caseload is stabilising, and the past trend of increased historical backlogs is reversing.
DPO decides that transferring member does not have to be an earner to have a statutory transfer credit right
TPO’s latest pension scam determination concerns a February 2015 transfer from a final salary occupational pension scheme to a small self-administered scheme (SSAS) that was later alleged to be a scam arrangement. The member complained to TPO that the transferring trustee had failed in its duty of care by allowing the transfer despite multiple warning signs, it had not followed TPR guidance, and the member, Mrs T, did not have a statutory right to transfer because her foster carer income was not employment income meaning they were not an earner as required by the transfer provisions in the Pension Schemes Act 1993.
The Deputy Pensions Ombudsman (DPO) determined that the ‘assumed interpretation’ in the Hughes v Royal London [2016] High Court case that a transferring member must be earning income at the time of a transfer did not need to be followed. Instead, the DPO preferred an alternative interpretation put forward by the judge in that case – that the definition of ‘transfer credits’ under the Pension Schemes Act 1993 which provided the complainant member with a statutory right to acquire such credits under a receiving occupational pension scheme, did not require the transferring member to be an earner. Rather the term ‘transfer credits’ described the nature of the rights being acquired under the receiving scheme.
The DPO found that the SSAS rights provided to Mrs T were indeed ‘transfer credits’, being rights of the type that could be provided to an earner under the SSAS rules, concluding that the member did have a statutory right to transfer to the SSAS.
The DPO went on to consider the transferring trustee’s legal duty of care and due diligence obligations. In keeping with TPO’s decision in the recent Mr D transfer determination, the DPO found that the trustee did not have a legal duty to investigate the member’s position or scam risks or issue warnings, despite the guidance set out in the Scorpion leaflets that suggested steps that could be taken by a scheme if initial checks revealed scam indicators.
The DPO did not uphold the member’s complaint, finding that Mrs T had a statutory right to transfer and that the trustee had no legal duty to investigate or warn about potential scam risks beyond confirming statutory requirements were met (which it had).
DC: ABI update on Mansion House Compact progress
The Association of British Insurers’ (ABI) annual Mansion House Compact progress update confirms that investment in unlisted equities within signatories' DC default funds grew from £0.8bn in February 2024 to £1.6bn out of a total of £268bn assets as of February 2025.
The Mansion House Compact is a voluntary agreement set up in 2023 by 11 pension providers with the aim of allocating at least 5% of their DC default funds to unlisted equities by 2030. Progress has been made in increasing unlisted equities investment and in resolving operational challenges, but difficulties remain. The ABI has noted that the new value for money framework expected in 2028 will play a “critical role” in shifting the focus from cost to value, which is seen as a pre-requisite for success of the Compact.
DC: Sterling 20 Initiative
As part of its increasing investment in the productive finance initiative, the Government announced on 20 October 2025 the setting up of Sterling 20, an investor-led partnership comprising 20 of the UK’s largest pension funds and insurers. With the Government and City of London Corporation, the partnership will work “to channel the nation’s savings into key infrastructure and fast-growing businesses in key modern industrial strategy sectors like AI and fintech”.