The UK government has published the new Pension Schemes Bill, estimating that around 20 million Brits could stand to benefit from the reforms outlined.

The bill, which is part of the government’s broader Plan for Change, is designed to help working people plan for their retirement by making pensions simpler to understand, easier to manage, and driving better value over the long term.

It is also intended to create a more efficient, resilient pension landscape, by laying the foundation for the second phase of the pension review to examine outcomes for pensioners and set out how to develop a fair and sustainable pensions system.

The new bill provides further insight into a number of the government's upcoming reforms, including plans for a value-for-money framework and to introduce increased flexibility for defined benefit (DB) pension schemes to safely release surplus funds.

It also builds on the recent Pension Investment Review report, in which the government confirmed plans to double the number of 'megafunds', by requiring all multi-employer defined contribution (DC) pension schemes and Local Government Pension Scheme (LGPS) pools to operate at megafund level, managing at least £25bn in assets by 2030.

In addition to this, the bill looks to address a number of ongoing issues, including removing the restrictions that prevent the Pension Protection Fund (PPF) from reducing its annual levy, and re-establishing the legal standing of The Pensions Ombudsman (TPO) as a competent court.

Chancellor, Rachel Reeves, said the bill is a “game changer, delivering bigger pension pots for savers and driving £50bn of investment directly into the UK economy”.

This was echoed by Pensions Minister, Torsten Bell, who argued that the government is now “ramping up the pace of pensions reform”.

“Workers deserve to get better bang for each buck saved, and these sweeping reforms will make sure they do,” he said.

“Pension saving is a long game, but getting this right is urgent so that millions can look forward to a higher income in retirement.”

The Pension Schemes Bill covers plans to:

- Introduce a value-for-money framework to protect savers from getting stuck in underperforming schemes.

- Simplify retirement choices by requiring all pension schemes to offer default routes to an income in retirement.

- Bring together small pension pots worth £1,000 or less into one pension scheme that is certified as delivering good value to savers.

- Introduce new rules creating multi-employer DC scheme “megafunds” by requiring DC schemes to have at least £25bn of assets in their main default arrangement by 2030 or be on route to achieving that scale by 2035, so that "bigger and better" pension schemes can drive down costs and invest in a wider range of assets.

- Consolidate the Local Government Pension Scheme (LGPS), with assets held in six pools that can invest in local areas infrastructure, housing and clean energy.

- Allow trustees of well-funded DB schemes to access surplus funds, when safe to do so, in order to help unlock some of the £160bn surplus funds to be reinvested across the UK economy and boost business productivity.

- Remove the restrictions that prevent the Pension Protection Fund (PPF) from reducing the annual pension protection levy it collects, when it is not required.

- Extend the definition of ‘terminal illness’ in the PPF and Financial Assistance Scheme legislation, so that eligible members who are diagnosed as terminaly ill can receive payments at an earlier stage of their illness.

- Re-establish the legal standing of The Pensions Ombudsman (TPO) as a competent court to make enforceable determinations in pensions overpayment recoupment cases without requiring a county court judge’s order.

This article originally appeared on our sister title, Pensions Age.

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