Government to make DB surplus more accessible to employers

Government to make DB surplus more accessible to employers

20 Jun 2025

This edition of XPS Express considers the UK Government’s recent indications to make it simpler for employers to access surplus from defined benefit (DB) pension schemes.

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Key Developments: At a glance

• The UK Government has published its response to the Department for Work and Pensions consultation ‘Options for Defined Benefit Schemes’, introducing a statutory power for trustees to enable surplus extraction in the Pension Schemes Bill.
   
• The response indicated a potential change in the threshold for extracting surplus from buyout to a low dependency basis, providing greater scope to utilise DB surplus.
   
• Where running on for surplus is viable and in employers’ interests, employers should seize the opportunity to formulate a proposal to their scheme trustees and drive decisions on how surplus can be extracted.
   
• Additional guidance has also been issued by The Pensions Regulator around endgame options, confirming its support for run-on in the right circumstances.

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