DWP Sets 100% Funding Threshold for DB Surplus Releases as April 2027 Rules Near
Updated
Updated · xpsgroup.com · Jun 15
DWP Sets 100% Funding Threshold for DB Surplus Releases as April 2027 Rules Near
3 articles · Updated · xpsgroup.com · Jun 15
Summary
Britain’s DWP published draft rules on 10 June allowing defined-benefit pension schemes to release surplus only if they are at least 100% funded on a low-dependency basis.
A scheme actuary must certify the fund is “as likely as not” to stay fully funded on that basis for the next three years, and both trustees and the employer must approve any payment.
The Pensions Regulator issued parallel guidance for trustees, stressing surplus release should be a deliberate decision and outlining factors to weigh before agreeing withdrawals.
Two TPR case studies model a £1 billion scheme that is 110% funded on a buyout basis, giving trustees practical reference points for how a release framework could work.
The consultation runs until 2 September, with final regulations expected to take effect from April 2027 as the government pushes broader flexibility in how DB surpluses are used.