Question to the Department for Work and Pensions:

To ask His Majesty's Government what safeguards will be put in place to ensure that communications and promotional material relating to surplus release and endgame strategies are balanced, accurate and in the best interests of scheme beneficiaries.

The Pension Schemes Act 2026 introduced reforms enabling more trustees of well-funded occupational Defined Benefit (DB) pension schemes to share surplus with the sponsoring employer and benefit members. Regulations will set out the conditions that trustees must meet before surplus can be released. These protections are designed to ensure that members’ promised benefits remain secure. The Department for Work and Pensions will consult on these draft regulations.

The Pensions Regulator (TPR) has published guidance to support trustees in making endgame decisions. TPR will consult on further guidance, on matters that trustees should consider when releasing surplus. Trustees will continue to act in accordance with their duties which require them to act in the interests of scheme beneficiaries, alongside fulfilling the clear standards for effective member communications, as is already overseen by TPR.

TPR’s 2024 survey of trust-based DB schemes indicated that around 62% of the schemes with a long-term objective intended to buy-out in the insurance market. Under the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024, trustees must set a funding and investment strategy determining how they plan to provide benefits over the long-term. The DB surplus changes allow trustees of all schemes the choice to be able to use surplus to benefit members and employers, but schemes are not required to release surplus.

The Impact Assessment for the Pension Schemes Act 2026 estimated that £11.2 billion of additional surplus funds are expected to be released over a 10-year period as a result of this legislative change, based on assumptions about take-up and behaviour. £160 billion is the total estimate of DB scheme surplus, for schemes in surplus estimated at September 2024. Actual levels of surplus release will depend on market conditions, individual scheme circumstances and trustee decisions.

TPR is an independent regulator responsible for determining how it deploys its resources to meet its statutory objectives. The Government keeps under review the implications for TPR of developments in the DB pensions landscape and for its resources.