Pensions - Articles - TPR publishes its latest Annual Funding Statement

TPR’s latest AFS [Annual Funding Statement 2026] reports that six in ten (60%) schemes are in surplus on a buyout basis, rising to 80% on a low dependency basis and 90% on a technical provisions basis. 

 

TPR’s Executive Director of Market Oversight Ben Gunnee, said: “DB funding has changed dramatically, and it’s prompting trustees and employers to rethink their endgame. run-on, superfund consolidation, buyout — whichever route you’re considering, the decisions you make now will shape members’ futures. The environment is shifting, and staying still won’t keep you ahead. We expect trustees to maintain their focus on long-term planning and ensure their scheme has a clear and well-evidenced endgame strategy.” 

 

While the overall picture is positive, trustees should remain alert to wider economic and geopolitical uncertainty. Understanding the risks to investment strategies and employer covenants remains essential, particularly as schemes move closer to their long-term objectives. 

 

This year’s statement is particularly relevant for schemes with valuation dates between 22 September 2025 and 21 September 2026, now referred to as Tranche 25/26 (T25/26) to reflect the calendar year. It also clarifies aspects of the code which will be helpful for all schemes. 

 

TPR will shortly publish a statement outlining issues trustees should consider around surplus release. Final regulations are expected to come into force in 2027. Also, looking to the future, the AFS highlights the government’s proposed changes to surplus release rules included in the Pensions Scheme Bill which received Royal Assent on 29 April 2026. 

 

As funding positions improve, valuations are increasingly becoming a strategic tool, informing the development or refinement of endgame plans and providing a structured opportunity to assess progress against long-term objectives. Whether using Fast Track or Bespoke, the key is demonstrating that the scheme’s long-term funding and investment strategy is well-supported and deliverable. 

 

Experience to date supports TPR’s estimate that around 80% of schemes should be able to meet the Fast Track approach under the new DB funding regime. Fast Track may not be the right approach for all schemes. However, schemes that meet Fast Track requirements can expect proportionately less regulatory engagement and simpler reporting requirements.