New proposals setting out how billions of pounds in DB pension scheme surpluses could be safely released have been launched today (10th June), helping unlock billions of pounds for the UK economy.
• Trustees, employers and members invited to shape new rules on how Defined Benefit (DB) surpluses can be safely released
• Plan will give trustees the option to unlock billions of pounds, with around four in five DB schemes in surplus
• Part of ambitious pension reform agenda to boost both investment and savers pensions
New proposals setting out how billions of pounds in DB pension scheme surpluses could be safely released have been launched today (10th June), helping unlock billions of pounds for the UK economy.
Launched by the Minister for Pensions today, the consultation sets out plans to give trusteesthe flexibility to release some surplus funds to benefit employers, scheme members and the wider economy.
Funding levels for DB pension schemes are currently in their strongest ever financial position, with the number of schemes in surplus having quadrupled over the last five years, meaning that for most schemes assets now exceed the value of promised pension benefits.
The proposals include strong protections for scheme members, including the need for independent certification that scheme funding will remain strong after any surplus release.Changes to tax law will also make it easier for schemes to allow scheme members to benefit from a surplus release.
Following the passing of the Pension Schemes Act, this consultation marks the next stage in a programme of reform that will boost investment and benefit pension savers.
Minister for Pensions Torsten Bell said:
"The steady world of DB pensions has seen a huge change take place. For the first time in a generation, DB pension schemes are in a genuinely strong financial position - with the vast majority of schemes now having a surplus. This is something well worth celebrating.
"Now is the time to give trustees the option of safely translating some of those surpluses into real benefits for members and employers."
The plans will strengthen regulatory oversight, with trustees required to notify The Pensions Regulator (TPR) of surplus release detailing information such as a scheme's assets, liabilities and surplus payments to employers and members. TPR and the Financial Reporting Council will also be providing further guidance and support to the regulations.
The consultation will run for 12-weeks with the new regime expected to be in place from April 2027.
The Pensions Regulator has today issued a statement to help trustees understand the best practice now under the current regulatory framework.
Richard Knox, TPR's Executive Director, Strategy, Policy and Analysis, said:
"Many well run, well governed and well-funded defined benefit schemes are also considering how to safely release surplus to enhance member benefits and strengthen sponsoring employers. To help, today, we have set out the principles schemes should follow when making decisions on surplus which we will continue to evolve as the new regulatory framework emerges."
The consultation swiftly builds on the landmark Pension Schemes Act 2026 that received royal assent in April and forms part of the Government's wider programme to reform the pensions system to support savers pensions and investment in the wider economy.
Additional Information
• The consultation was launched at the PMI conference on Wednesday 10th June and will be available for comment until Wednesday 2 September.
• It is open to everyone, but we would particularly welcome views from sponsoring employers and trustees of DB schemes, managers and service providers, members of DB pension schemes and groups representing members.
• The draft regulations cover the requirements that will need to be met for schemes to release surplus. These protections include actuarial certification that schemes will remain funded above a minimum funding threshold for DB schemes, as well as requirements for member notification. Powers sit with trustees who have a legal dutyto act in the interest of scheme beneficiaries.
• The Pensions Regulator (TPR) will provide guidance for trustees to support the regulations, and the Financial Reporting Council will provide technical guidance for actuaries.
