Stay Compliant with Financial Services Accounting Software

The regulatory landscape is evolving

Compliance requirements are intensifying in the UK pensions sector as The Pensions Regulator (TPR) moves from administrative to proactive governance of public money. Although this is crucial to protecting savers’ money, it does increase the pressure on pension providers.

Unlike many small business owners, including sole traders, who rely on standard bookkeeping software to manage day-to-day finances, mid-sized pension schemes operate in a more complex environment.

Recent regulatory changes from TPR outline the effective administration of pension schemes. While not necessarily introducing any new legal obligations, this guidance highlights the risks associated with data handling, legacy systems, and complex processing. These risks are becoming more pronounced as regulations shift towards continuous monitoring, real-time data access, and reporting transparency, alongside other initiatives such as Making Tax Digital.

We discuss the two key, data-driven developments mid-sized schemes should be aware of, notably the introduction of pension dashboards and the Defined Benefit (DB) funding rules. Visit our market page or get in touch with our dedicated team to learn how Xledger supports pension funds, local government schemes, and other FinServ organisations.

Defined Benefit funding rules

The new Defined Benefit funding rules introduce a long-term strategic approach to how pension schemes manage funds and risk. A key requirement is for pension schemes to define how they will reach a low-dependency (low-risk) funding strategy as they mature. 

One of the most significant updates in these changes, due to come into effect from 2027, is how mid-sized scheme providers can manage surplus funds.

In simple terms, the changes allow:

1. Easier access to surplus funds
2. Lower thresholds for releasing surplus funds
3. New ways to distribute surplus funds
4. More flexibility for trustees, while still managing surplus responsibly

Mid-sized pension funds face an interesting shift in scheme management as a result of these changes, as they are often large enough to have a meaningful surplus, but too small to have already implemented advanced digital architecture. These new surplus management opportunities mean that pension scheme providers must take an active role in tracking, reporting, modelling, and managing the surplus to stay compliant. 

Compliance strategies for financial services organisations

The evolving requirements identify the importance of robust accounting software for financial services organisations, capable of handling real-time data queries and compliant reporting.

While functionality is critical, systems should provide a user-friendly interface and an expert support team, ideally with UK-based support to align with local regulatory requirements.

In light of the changes, Pension fund providers may need to review their compliance strategies. Here are seven ways that pension scheme providers can strengthen compliance: 

1. Conduct full data audits
2. Assess real-time insights capabilities
3. Review the actuarial and funding strategy
4. Review technology and system limitations
5. Enhance regulatory reporting and audit trails
6. Improve system integrations
7. Develop a dashboard readiness plan

For many mid-sized pension scheme providers, these changes highlight the need to move from fragmented legacy systems towards integrated, automated, and insightful cloud-based financial software. 

As UK pension regulation becomes more data-driven, compliance is no longer a periodic exercise — it’s a continuous necessity. To navigate and thrive in the changing regulatory environment, mid-sized pension providers must ensure their business systems can deliver real-time, accurate, and auditable financial data. 

Book your free demo with our expert consultants to learn how Xledger can help your financial services organisation stay compliant with changing regulations.