# Pension Schemes Act 2026, Section 16: Consequences of an intermediate rating

Extent: E+W+S

(1) Value for money regulations may make provision about the consequences of the assigning under section 15(1) of an intermediate rating to a regulated VFM scheme or regulated VFM arrangement in respect of a VFM period.
(2) Without prejudice to the breadth of subsection (1), value for money regulations may require responsible trustees or managers of a scheme or arrangement to which any grade of intermediate rating has been assigned to—
(a) prepare a plan (an “improvement plan”) specifying actions that the responsible trustees or managers propose to take with a view to improving the scheme’s or (as the case may be) arrangement’s performance with regard to the provision of value for money;
(b) provide a copy of the plan to the Pensions Regulator;
(c) prepare an action plan and provide a copy of it to the Pensions Regulator;
(d) give notice in a prescribed format to any person who is a participating employer in relation to the scheme or arrangement of—
(i) the VFM rating that has effect in relation to the scheme or arrangement;
(ii) any actions specified by virtue of paragraph (a) in an improvement plan;
(iii) any actions the trustees or managers consider it is appropriate for the employer to take having regard to the rating assigned to the scheme or arrangement;
(e) ensure that no person becomes an employer in relation to the scheme or arrangement for as long as the scheme or (as the case may be) arrangement continues to have an intermediate rating;
(f) take any other steps that may be prescribed.
(3) Value for money regulations may—
(a) make further provision about what may or must be included in an improvement plan;
(b) confer additional functions on the Pensions Regulator in connection with schemes that are assigned an intermediate rating.
(4) In this section—
“employer”, in relation to a regulated VFM scheme or regulated VFM arrangement, means a person who employs persons who are members of the scheme or (as the case requires) arrangement;
“participating employer” in relation to a regulated VFM scheme or regulated VFM arrangement, means an employer who is for the time being making contributions to the scheme or (as the case requires) arrangement.

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Source: https://www.legislation.gov.uk/ukpga/2026/22/section/16 (the official version)
Page: https://openlegislation.uk/pension-schemes-act-2026/section-16
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.