Third Report - Defined benefit pension schemes
Select Committee
Work and Pensions Committee
HC 144
26 March 2024
Government response
2nd Special Report - Defined Benefit Pensions Schemes: Government Response · published 30 Apr 2025
Recommendations & Conclusions
8 results
1
Conclusion
Accepted
Para 19
We welcome that scheme funding has improved substantially since the mid- 2010s.
Conclusion
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 …
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Government Response Summary
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
Para 45
Work with open DB schemes to address funding code concerns and report back to Parliament.
Conclusion
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 …
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Government Response Summary
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
Para 59
Monitor trends in pension scheme buy-out demand and alternatives, working with financial regulators.
Conclusion
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 …
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Government Response Summary
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
Para 83
Undertake research on pension schemes' discretionary increases for pre-1997 benefits and reasons for non-payment.
Conclusion
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 …
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Government Response Summary
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
Para 96
Continue working with industry to create an environment supporting UK economy investment
Recommendation
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 …
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Government Response Summary
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
Para 113
Use the trustee register to report annually on toolkit completion rates
Recommendation
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 …
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Government Response Summary
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
Para 125
Introduce primary legislation for pension Superfunds after consulting on framework details
Recommendation
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 …
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Government Response Summary
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
Require pension schemes to justify their chosen approach and member benefits
Conclusion
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 …
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Government Response Summary
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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