Funding levels for DB pension schemes are currently at their strongest historical financial position. Over the last five years, the number of schemes in surplus has quadrupled, meaning that for the vast majority of schemes, total assets now comfortably exceed the value of promised pension benefits.
Key Protections and Safeguards
- Independent Actuarial Certification: Trustees must secure independent certification proving the scheme remains funded above a strict minimum threshold after any surplus release.
- Enhanced Regulatory Oversight: Trustees must notify The Pensions Regulator (TPR) and submit detailed data on assets, liabilities, and payments. TPR and the Financial Reporting Council (FRC) will provide ongoing guidance to ensure compliance.
Tax Law Changes
- Frictionless Member Benefits: Tax laws are being updated to make it easier for schemes to allow members to directly share in the benefits of a surplus release.
Consultation Timeline and Next Steps
- Consultation Period: Open from 10 June 2026 until 2 September 2026. Feedback is welcomed from employers, trustees, and member representatives.
- Implementation: The new regulatory regime is expected to take effect in April 2027.