DWP DB surplus consultation 2026

Commenting on the DWP consultation launched today on surplus release regulations, Laura McLaren, Head of DB Scheme Actuary, Hymans Robertson, said:

“The Pension Schemes Act created the legal foundation for greater surplus flexibility - but left much of the real substance to secondary legislation. With today’s consultation on the draft regulations, we’re finally seeing that detail start to crystallise.

“Full funding on a low‑dependency basis as the threshold for surplus extraction is no surprise; it’s been well signposted. But the draft regulations now set out the framework trustees must follow before any surplus can be released, including actuarial certification and the required notifications to members and TPR.

“We support the core aim: strong member protection balanced with appropriate flexibility. But ongoing surplus sharing must be operationally workable. If trustees and sponsors see only governance drag, they won’t view it as a viable long‑term option.

“That’s why the practicalities matter. The proposed three‑year forward‑looking test needs to be proportionate. And because trustees must notify members at least three months before any payment, the full process effectively stretches to around six months. That’s a long cycle – and it makes the current framework feel less suited to more regular or frequent surplus distributions.

“Ultimately, getting the detail right is essential to give schemes, trustees and employers the confidence to engage – while safeguarding better outcomes for members. And with another piece of the puzzle now on the table, alongside TPR’s accompanying statement, it’s clear we’ll see more of the picture come into focus over the months ahead.”

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