Industry experts at the Pensions and Lifetime Savings Association (PLSA) Investment Conference 2025 have suggested that defined benefit (DB) regulation must evolve to avoid being misaligned with the government's growth agenda.

Speaking on a panel session, Stagecoach Group Pension Scheme trustee and group pensions director, John Hamilton, said that "we need to evolve the regulation for the world we have right now", noting that the regulations were written in a "very different" context.

"The world we have now needs growth," he continued, arguing that the UK has "fantastic" infrastructure in the UK in terms of regulators and industry bodies that aren't being taken advantage of.

Universities Superannuation Scheme corporate affairs director, Richard Williams, agreed that the landscape has changed, acknowledging that there is a debate about how The Pensions Regulator's (TPR) DB Funding Code fits with the government's growth lens.

PLSA head of DB, LGPS and investment and session chair, Justin Wray acknowledged, however, that while it is "tempting in abstract" it can be difficult when considering specifics, noting that if investments go wrong, savers could ask why regulators weren't doing more.

But Hamilton argued that whilst "of course, some schemes will fail", others will succeed, arguing that "that's the purpose of insurance".

Further updates in the DB space are expected soon, as Pensions Minister, Torsten Bell, also confirmed at the conference that the government is set to share more details on some of the broader DB surplus rule changes in its response to the options for DB schemes consultation “this spring”.

In the meantime, however, he suggested that some DB schemes “may want to examine the position of members with non-indexed pre-1997 accruals when considering the use of any surplus”.

Further updates are also expected from the minister “shortly”, amid growing requests from the Work and Pensions Committee (WPC) to address this issue.

This wasn't the only potential surplus consideration raised during the conference, as TPR chair, Sarah Smart, was also asked about the impact of the Virgin Media case, amid concerns that this could "wipe" the surplus from currently well-funded schemes.

Smart agreed that clarity on this point is "really important", arguing that "we don't see it as a good use of resources across the industry to spend lots of time on this".

"We think there are other more important things around dashboard and stuff like that," she continued, stressing the need for industry to work together to get this done.

However, Smart also highlighted the case as an example of the need for pension trustees to consider broader issues when discussing how to use any DB surpluses.

"It's important for trustees to really understand the potential for some things that have happened in the past to come back and bite you and actually hit your surpluses in a way that you completely didn't expect," she explained.

"So that's an important factor to take into account when you're looking at sharing out surplus between different benefits, you know, enhanced benefits, employer extraction, etc.."

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