Workplace Pensions
The question
To ask the Secretary of State for Work and Pensions, what steps her Department is taking to safeguard members' benefits when a sponsoring employer seeks to extract pension scheme surpluses.
Answered by Torsten Bell
Currently, some Defined Benefit schemes can already consider releasing their surplus under existing rules. The Pension Schemes Bill will provide more flexibility for trustees of these and other well-funded schemes to safely share some surplus with employers and members. This is underpinned with strict funding safeguards to ensure members’ pensions are protected.
Scheme trustees are required to act in the interest of scheme beneficiaries and will be responsible for agreeing to any decisions on surplus release. Schemes will also need to meet a minimum funding level and require actuarial certification before the release of any surplus. Further, our scheme funding regulations, overseen by the Pensions Regulator, require that trustees maintain a strong funding position so they can pay members’ future pensions when they fall due, including planning for future volatility.
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