Defined benefit pension schemes

Work and Pensions Committee Closed Inquiry
Opened: 16 Mar 2023 Closed: 5 May 2024 Parliament page
Defined benefit (DB) pension schemes promise to pay pension benefits based on salary and length of service. There are over 5,100 UK private sector DB schemes, with around £1.4 trillion in assets. DB schemes are in decline in the private sector. The number of private sector employees still accruing new … Read more
9 Recommendations
14 Conclusions
1 Report
6 Oral sessions
15 Letters
6 Events
Activity timeline 29 events
30 Apr
2025
Report published
4 Dec
2024
Correspondence
26 Mar
2024
Report published
13 Mar
2024
Correspondence
6 Mar
2024
Correspondence
7 Feb
2024
Correspondence
31 Jan
2024
Correspondence
24 Jan
2024
Correspondence
10 Jan
2024
Oral evidence
10 Jan
2024
Correspondence
10 Jan
2024
Correspondence
10 Jan
2024
Correspondence
Oral evidence sessions 6 sessions
10 Jan 2024
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Work and Pensions Committee
Bim Afolami · HM Treasury Fiona Frobisher · The Pensions Regulator Katie Farrington · Department for Work and Pensions Laura Webster · HM Treasury Neil Couling · Department for Work and Pensions Paul Maynard · Department for Work and Pensions Peter Schofield · Department for Work and Pensions
29 Nov 2023
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Work and Pensions Committee
Louise Davey · The Pensions Regulator Nausicaa Delfas · Financial Ombudsmen Service Neil Bull · The Pensions Regulator
8 Nov 2023
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Work and Pensions Committee
Barry Kenneth · Pension Protection Fund Neil Walsh · Prospect Oliver Morley · Money and Pensions Service Richard Nicholl · Pensions Action Group Roger Sainsbury · Deprived Pensioners Association Sara Protheroe · Pension Protection Fund Terry Monk · Pensions Action Group
18 Oct 2023
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Work and Pensions Committee
David Carson · Hewlett Packard Pension Association (HPPA) Harus Rai · Capital Cranfield Janice Turner · Association of Member Nominated Trustees Leonard Bowman · Hymans Robertson Nick Coleman · BP Pensioner Group Robert Smith · Royal Ordnance Pensioners Association Steve Hitchiner · Society of Pension Professionals
6 Sep 2023
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Work and Pensions Committee
Adam Saron Brian Denyer · Abrdn Luke Webster · The Pension Superfund Serkan Bektas · Insight Investment Simon True · Clara-Pensions Limited Tracy Blackwell · Pension Insurance Corporation plc Yvonne Braun · ABI
21 Jun 2023
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Work and Pensions Committee
Dr Con Keating · Brighton Rock Group Joe Dabrowski · Pension and Lifetime Savings Association Leah Evans · Institute and Faculty of Actuaries Mr Derek Benstead · First Actuarial LLP Mr John Ralfe Mr Martin Hunter · Railpen Professor Iain Clacher · University of Leeds Sir Steve Webb · Lane, Clark & Peacock
Title HC No. Published Items Response
Third Report - Defined benefit pension schemes HC 144 26 Mar 2024 23 Responded
Recommendations & Conclusions
8 results
Clear
1 Conclusion Accepted
Third Report - Defined benefit pen…
We welcome that scheme funding has improved substantially since the mid- 2010s.
We welcome that scheme funding has improved substantially since the mid- 2010s. However, the PPF and the ONS have produced different estimates of the extent to which the value of the assets in DB schemes reduced over 2022. The PPF … Read more
Government Response
The ONS, TPR, and PPF have already worked together, publishing a joint statement on December 4, 2024, to clarify differences in their DB pension scheme data. They have also committed to ongoing collaboration.
Department for Work and Pensions
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4 Conclusion Accepted
Third Report - Defined benefit pen…
Work with open DB schemes to address funding code concerns and report back to Parliament.
Open DB schemes help meet two important objectives: providing adequate incomes in retirement and investing in UK productive finance as they have greater capacity for this than closed schemes. Those responsible for running DB schemes have long expressed concerns that … Read more
Government Response
The government states that TPR's new funding code includes a specific chapter and guidance for open schemes, and updated covenant guidance was published in December 2024, developed through consultation with open schemes. It commits to monitoring the effectiveness of these new regulations and guidance.
Department for Work and Pensions
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6 Conclusion Accepted
Third Report - Defined benefit pen…
Monitor trends in pension scheme buy-out demand and alternatives, working with financial regulators.
Many trustees and scheme sponsors will want to enter an arrangement to buy-out scheme benefits with an insurer and we welcome the security for scheme members this provides. However, not all will be able to do so, at least in … Read more
Government Response
The government states that TPR already monitors trends in demand for buy-out and its alternatives through market engagement and modelling. TPR is actively working with the Prudential Regulation Authority (PRA) to manage systemic risk by ensuring trustee preparedness and modelling future demand.
Department for Work and Pensions
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9 Conclusion Accepted
Third Report - Defined benefit pen…
Undertake research on pension schemes' discretionary increases for pre-1997 benefits and reasons for non-payment.
Some pension scheme members are dependent on discretionary increases to ensure their pension payments keep up with the cost of living. Where these have not been awarded the effect has been, over time, to erode their standard of living. This … Read more
Government Response
TPR has already undertaken the recommended research on discretionary increases for pre-1997 benefits through its Defined Benefit 2024 survey, with specific findings published on March 25, 2025. The research provides data on schemes allowing and providing these benefits, as requested.
Department for Work and Pensions
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11 Recommendation Accepted
Third Report - Defined benefit pen…
Continue working with industry to create an environment supporting UK economy investment
We welcome confirmation from TPR and Ministers that the interests of pension savers are paramount and that investment decisions are for trustees in line with their fiduciary duties to act in the best interest of scheme beneficiaries. The Government should … Read more
Government Response
The government committed to legislating for a legislative authorisation regime for Superfund consolidators, with a consultation response this spring and the final Pension Investment Review report in Spring 2025 before legislation in the Pension Schemes Bill.
Department for Work and Pensions
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15 Recommendation Accepted
Third Report - Defined benefit pen…
Use the trustee register to report annually on toolkit completion rates
We welcome the introduction of a trustee register as a way to improve TPR oversight of trustees and to communicate directly with them. We also welcome TPR’s decision to update the Trustee toolkit. We recommend that TPR should use the … Read more
Government Response
The government committed that once the trustee register is fully operational, it should be possible to publish anonymised aggregated data, including the number of trustees who have completed the toolkit.
Department for Work and Pensions
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16 Recommendation Accepted
Third Report - Defined benefit pen…
Introduce primary legislation for pension Superfunds after consulting on framework details
TPR sees consolidation, including through Superfunds, as one of the main ways to improve governance, providing advantages of scale in terms of investment and governance. The Government committed to legislating for this in Mansion House as did DWP’s 2023 response … Read more
Government Response
The government committed to introducing provisions for a dedicated authorisation and supervision framework for Superfunds in the forthcoming Pension Schemes Bill, with anticipated regulations to be consulted upon for further details.
Department for Work and Pensions
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18 Conclusion Accepted
Third Report - Defined benefit pen…
Require pension schemes to justify their chosen approach and member benefits
Given the improvements in scheme funding, trustees must ensure they secure benefits for members, be that through consolidation, buy-out or letting schemes run on. TPR should be proactive in encouraging trustees to assess the potential costs and benefits of different … Read more
Government Response
The government explained that the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024 will require schemes to submit a statement of strategy to TPR, which includes trustees' assessment of their approach and reflections on key decisions.
Department for Work and Pensions
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Government Response AI assessment · 23 of 9 classified
Accepted 8
Acknowledged 9
Deferred 2
Rejected 4
Total 9 recs + 14 conclusions
Correspondence 15 letters
4 Dec 2024 Statement from the Office of National Statistics (ONS), the Pensions Regulator (TPR) and the Pension Protection Fund (PPF) on valuing the assets in Defined Benefit (DB) pension schemes
Parliament page
13 Mar 2024 Correspondence with The Pensions Regulator relating to the impact on Defined benefit pension schemes after the LDI episode
Parliament page
6 Mar 2024 Correspondence with the Minister for Pensions relating to Defined Benefit pension schemes
Parliament page
7 Feb 2024 Correspondence from TPR relating to Defined Benefit pension schemes with Liability Driven Investments
Parliament page
31 Jan 2024 Correspondence with Economic Secretary to the Treasury relating to Defined benefit pensions
Parliament page
24 Jan 2024 Correspondence with the Economic Secretary to the Treasury relating to Defined benefit pension schemes - evidence session follow-up
Parliament page
10 Jan 2024 Correspondence with the Minister for Pensions relating to meeting with the Pensions Action Group
Parliament page
10 Jan 2024 Correspondence with the Office for National Statistics relating to Defined benefit pension schemes
Parliament page
10 Jan 2024 Correspondence with the Minister for Pensions relating to Proposed Scheme Funding Regime — Open Defined benefit pension schemes
Parliament page
13 Dec 2023 Correspondence with the Pension Protection Fund relating to Defined benefit pension schemes
Parliament page
29 Nov 2023 Correspondence with Pension Protection Fund relating to Defined benefit pension schemes
Parliament page
8 Nov 2023 Correspondence from Clara-Pensions relating to defined benefit pension schemes
Parliament page
8 Nov 2023 Correspondence with the Pension Protection Fund relating to Pension Protection Fund compensation levels
Parliament page
25 Oct 2023 Correspondence with the Pension Protection Fund relating to defined benefit pension scheme inquiry and updated data
Parliament page
18 Oct 2023 Correspondence with the Prudential Regulation Authority relating to Defined benefit pension scheme consolidation
Parliament page