Laura McLaren, Head of DB Scheme Actuary Services, Hymans Robertson says: “We welcome TPR’s latest guidance to support trustees and sponsors in considering the growing range of endgame options. The landscape is changing quickly, and this underscores the sheer breadth of issues to think about. Indeed, as this round-up of factors and case studies show, there is no one-size-fits all answer, and it is important that scheme and sponsor specific circumstances are robustly considered. Schemes should spend time carefully working through the range of options with an open mind. Landing closely behind last week’s DB options consultation response, and ahead of the hotly anticipated Pension Schemes Bill, the guidance looks set to be the first in a series of instalments and reiterates the government’s desire for progress within this area. As the legislative landscape evolves, TPR will need to consult and publish more detailed guidance on the factors that trustees should take into account when deciding whether to utilise the new statutory override power and when designing a framework for ongoing surplus release. Although trustees have generally been positive about the growing surplus flexibility, clear guidance being shared to support decision making is seen as a critical piece of the puzzle. This is a helpful first step and hopefully signals TPR’s focus in supporting this evolving area at pace.”
Rachel Croft, Chair of the APPT: "APPT welcomes the publication of TPR's guidance on new models and options in defined benefit pension schemes as a useful guide for trustees and scheme sponsors faced with key decisions in relation to long-term strategy and governance options for their schemes. Helpfully, TPR does not seek to mandate any particular approach. We look forward to working with DWP and TPR on the further development of the legislative and regulatory framework for DB surplus in recognition of the central role of trustees in determining management and use of surplus."
ACA Chair, Stewart Hastie: “Given market innovations, the ACA welcomes new TPR guidance for schemes on endgame options. It also appears to ‘fire the starting gun’ for trustees and employers to develop a plan for current and future surplus including considerations for running schemes on rather than insuring at the earliest opportunity. Whilst we expect more TPR guidance to follow next year on the new surplus flexibilities to be introduced in the 2025 Pensions Bill, these early steps will be important in setting the scene for achieving a mindset shift about how well funded UK DB pension schemes are viewed by trustees and sponsors.”
James Patten, partner in the UK Endgame Strategy team at Aon said: “The Pension Regulator has placed a strong emphasis on the importance of collaboration between employers and trustees when considering endgames, as well as recognising the need to uncover objectives and scheme circumstances before evaluating the most appropriate endgame for a scheme. We endorse that approach and the importance placed on carrying out a full risk assessment of the options that are more suitable for the scheme. We see modelling as fundamental to supporting schemes with these crucial strategic decisions. We also welcome TPR’s encouragement to document run-on strategies through comprehensive framework agreements and to develop policies on surplus sharing. While the majority of schemes are now in surplus, our 2025 Endgame survey showed only 17 percent of schemes have formulated a view about how surplus will be shared between members and the sponsoring employer in future. Surplus is likely to come under increasing focus from employers and member groups, whether or not a scheme chooses to run-on or buy-out. Developing a clear policy now will help reduce the likelihood of challenge and regret risk in future. At a point where the government is also exploring the idea of a public consolidator for small schemes, it’s helpful that TPR has noted that solutions already available in the insurance market for such schemes - developed by insurers and advisers - can accelerate the route to settlement. This is consistent with our experience - the current market for small schemes is particularly competitive.”
TPR- New models and options in defined benefit pension schemes
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