What the Pension Schemes Bill Means for Your Tech Strategy

By Senior Consultant, James Ward

Scale, tech, and data are about to become make-or-break factors for schemes and the providers who support them. In the first article in this series, I summarised the UK’s Pension Schemes Bill (PSB) and how it is reshaping the landscape for the country’s pension schemes through consolidation changes to investment criteria. Its focus was the bill’s most direct stakeholders, like asset managers and trustees.

This article looks a layer deeper and considers the impact on industry Order Management Systems (OMS) / Portfolio Management Systems (PMS) technology providers. The centrality of scale in the PSB’s objectives presents immediate and strategic opportunities for providers who can support the systems, data and operating models needed by the emerging and growing megafunds.

The PSB is igniting a once-in-a-generation shake-up, forcing operators to strategically consider tech, data and oversight models. Your decisions in response will define your ability to thrive in a consolidating market. Schemes that want to come out on top must get their tech and data strategy right.

Infrastructure as Strategy

With DC schemes consolidating from nearly 1,000 to as few as 50–100, and the number of Local Government Pension Schemes (LGPS) funds falling from 86 to potentially just 8-15, the platforms and operating models supporting UK pensions will undergo a secular process of centralisation and standardisation. This shift is creating demand for outsourced Chief Investment Office (OCIO) structures that can coordinate asset allocation across multiple external providers, while delivering governance, risk, and reporting efficiently.

The upshot is that OMS / PMS offering efficient, commodified solutions that scale easily are well-placed at the outset of this shift to service both smaller funds consolidating to stay in the game and larger ones eyeing acquisitions. On the other hand, if schemes don’t nail their consolidations, they risk locking in brittle, hard-to-scale architectures, incurring spiralling costs and undermining their ability to gain the benefits of scale the PSB is designed to effect – meaning they’ll fall just as competitors are rising.

Platforms will increasingly shape the strategic playing field for their users, thereby materially influencing the parameters in which business models form and evolve. For example:

• Schemes can shift from outsourcing to hybrid models with platforms that integrate third-party asset managers with in-house oversight tools. Such models facilitate scalable control without the need for large internal teams.
  • Similarly, managers can bundle data, reporting, and middle-office functions to buttress their core portfolio management offering, turning tech stacks into marketable value stacks.
  • However, these models are not totally risk-free. Unclear ownership of / accountability for data flows could lead to knotty problems like fragmented reporting and datasources or regulatory blind spots. These can lead to real-world liabilities in areas like valuation / cost transparency or ESG compliance. That’s why it’s essential to choose the model that works for your scheme and execute a successful implementation.
• Consolidators can build platform-trustee models, bringing governance, reporting, and operations of multiple schemes onto a single, modularised investments architecture to support scale while preserving scheme-specific policy levers.
• Funds can unify schemes and funds under a common platform, sharing infrastructure enabling relatively smaller players to benefit from tools which previously were only available to larger ones.

Infrastructure Platforms’ Centrality To the Next Phase

The platforms behind UK pension operations are becoming integrated operating environments.

The PSB’s impetus for larger schemes with more investment complexity (think private markets and infrastructure) means platforms that can convincingly support all that while adapting to new governance models could feel like they’re selling shovels in a gold rush.

A reputation as an OMS / PMS platform provider whose value proposition helps partners create value on the front to middle of the value chain would create a beachhead, encouraging schemes to consider back-office functions like custody for a full, end-to-end (E2E) solution with one partner provider.

Scale and reputation are the start but not the end. The infrastructure providers that will dominate the new landscape must:

• Deliver faster, more configurable implementations.
• Demonstrate successful implementations and, in time, mergers of smaller schemes.
• Thrive in an environment of constantly evolving regulatory expectations and data standards while maintaining impeccable core service provisions.
• Provide transparency and control required to satisfy trustees, regulators and fiduciaries.

Successful providers will solve whole-scheme needs, uniting investment, oversight, data, implementation and delivery under resilient, auditable and future-proof models.

What Schemes and Asset Managers Should Be Doing Now

For pension schemes planning mergers and / or replatforming, infrastructure changes take time, care and thought to plan and execute well, given their complexity and influence over your strategic options. Consider:

• Data integration readiness: can you absorb new data sources and formats from merging schemes or new asset classes?
  • If you only learn you’re not ready during onboarding or regulatory reporting, it’s too late to avoid delays, reconciliation errors or even missed compliance obligations.
  • In practice, challenges can arise from legacy records in incompatible formats, like ESG data models using different scoring systems, or illiquid asset data that lacks frequency or standardisation.
  • Some assets (like the infrastructure ones the PSB targets) may only be revalued quarterly or even annually. Schemes need systems the sort of operational design and careful integration that can handle interim “drift” valuations and asynchronous data updates.
• Governance and transparency: does your platform support auditability, risk oversight, and member reporting at larger scale?
• Service model adaptability: do you want to insource, outsource, or run a hybrid?
• Co-develop solutions with pension clients that solve common but thorny regulatory problems like ESG reporting, liquidity, and long-term value.
• Organisational buy-in: is your team informed about the changing regulatory landscape, and are they fully invested in the necessity and efficacy of the proposed changes?

What Tech Providers Should Be Doing

Choosing the right infrastructure partner is just as important as your internal strategy, so it’s worth knowing what good looks like. This is what the best providers should be doing now to help you deliver a robust, scalable tech strategy:

• Offering guidance and configurable templates for LGPS and DC clients undergoing mergers. The changes imposed by the PSB for some schemes will be deeply destabilising so they will appreciate partners offering a steadying hand on the tiller.
• Building reusable, modular integrations with third-party systems and reporting frameworks.
• Supporting delivery partners (consultancies, outsourcers, asset managers and more) to create joined-up transition programmes.

Providers who can offer out-of-the-box solutions will enjoy real commercial advantage, and opportunities to develop longterm relationships with large, growing partners.

What’s Next?

This is a realignment of the entire UK pensions operating system in which tech and investment strategies will intertwine.

For schemes and asset managers, the question is: how do we ensure our platform choices support growth, resilience, and fiduciary confidence in a more complex and consolidated future?

For tech providers: how do we position ourselves as indispensable partners in the new pension architecture?

The process to define the dominant infrastructure players in UK pensions for the next decade or more is already underway. The right infrastructure choices now will define your scheme’s ability to grow, adapt and meet the demands of the PSB and new landscape it creates. We can help you assess your current infrastructure, stress-test your data integration readiness and design an operating model built to scale, thrive and last, with resilience and regulatory confidence. If you’re planning change, let’s talk about how we can help you do it right.