The Pension Schemes Act 2026 (Commencement No. 1) Regulations 2026

Published: Mon 22nd Jun 26

Commenced Section 123 of the Pension Schemes Act 2026 regarding pension protection levies.

These Regulations bring into force Section 123 of the Pension Schemes Act 2026 on 29th June 2026.

The activated section grants the Board of the Pension Protection Fund the authority to adjust annual levies, including the power to reduce them to zero or a minimal amount, and establishes specific limits on how much those levies can be increased in subsequent years.

The order applies to the Secretary of State for Work and Pensions and the Board of the Pension Protection Fund.

Arguments For

The explanatory note states that the regulations allow the Board of the Pension Protection Fund the flexibility to reduce the annual levy to zero or a low amount when funds are not required.
The document notes that the provisions enable the Board to raise the levy again within a reasonable timeframe if necessary.
The legislation includes a safeguard designed to cap annual increases in the levy at a specific threshold, defined as the sum of the previous year's levy and 25% of the previous year's levy ceiling.

Arguments Against

Legal commentators may note that the document does not define the criteria for what constitutes a "reasonable time frame" for raising levies, potentially leading to administrative uncertainty.
Pension scheme operators might express concern regarding the predictability of future costs, as the regulations permit the reinstatement of levies that have been reduced to zero.
The methodology for the 25% cap on annual increases relies on the previous financial year's levy ceiling, which could be subject to fluctuation or complex calculation requirements for affected stakeholders.

Citation

These Regulations may be cited as the Pension Schemes Act 2026 (Commencement No. 1) Regulations 2026.

This section establishes the formal name by which the regulations are to be identified.

It serves as the standard legal reference for the statutory instrument.

Commencement

Section 123 of the Pension Schemes Act 2026 (pension protection levies) comes into force on 29th June 2026.

This provision sets the date for Section 123 of the primary Act to become legally effective. On 29th June 2026, the specific laws governing pension protection levies and the Board of the Pension Protection Fund's levy-setting powers take effect.

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