The Pensions Regulator (TPR) will consult on supporting guidance for trustees on defined benefit (DB) pension scheme surplus release later this year, TPR director of trusteeship, administration and DB supervision, David Walmsley, has confirmed.

Speaking at the Pensions Age Northern Conference, Walmsey highlighted the government’s recent announcement of a consultation on draft regulations that would allow trustees of well-funded DB pension schemes to release surplus funds to sponsoring employers, with a final set of regulations expected to come into effect from April 2027.

“For much of the past two decades, the conversation on DB has been around deficits, the need to repair funding gaps, and secure member benefits, but today, the landscape looks very different,” he said.

“Many schemes are well funded, and a significant proportion are in surplus. And this is a fundamental shift, and with it comes a new set of opportunities and responsibilities. We are keen to provide support to trustees in early discussions and preparation.”

Walmsey suggested that one of the most important questions arising from this new reality is how surplus should be approached, noting that the Pension Schemes Act creates greater flexibility for DB schemes on the release of surplus for sponsoring employers and members.

“Previously, as you know, DB schemes could only release surplus to the employer if the trustee and scheme rules allowed it, and only if the scheme was funded above buyout,” he continued, noting that more than half of DB schemes are currently in surplus on a buyout basis and more than three-quarters are in surplus on a low-dependency basis.

“We recognise that surplus release can play a really positive role. Where schemes are fully funded and where appropriate safeguards are in place, surplus has the potential to improve member outcomes and at the same time wider economic growth,” he said.

“But just as importantly, our position is grounded in a simple, enduring principle. The interests of members come first. That hasn't changed, and it will never change.”

Walmsey emphasised that surplus “is not free money” and exists because schemes have been prudently managed over many years, and that it represents security for members.

In light of this, he stressed that any discussion about releasing that surplus must begin with “clear-eyed assessments of risk, resilience, and long-term sustainability”.

“We expect trustees to ask the right questions. Is the scheme genuinely in a position of strength? Are members' benefits secure under a range of plausible future scenarios? And how does the decision align with the scheme’s long-term strategy, and its endgame?” he added.

“Because surplus release isn't a standalone choice, it sits within a broader set of options that trustees have, whether that's buyout, consolidation, or running on the scheme.

“What matters is that the choice made is the right one for the scheme at that time, and in the interest of members. It must be done in the right way. So, it means strong funding positions, clear long-term planning, robust governance, and above all, steadfast focus on member interests.”

He concluded that TPR are enabling trustees to make these informed, responsible decisions in a changing landscape, because “ultimately success in this area isn't measured by how much surplus is released, but whether members' benefits are secured, and whether the system remains resilient, trusted, and fit for the future”.

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