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Select Committee · Work and Pensions Committee

Defined benefit pension schemes

Status: Closed Opened: 16 Mar 2023 Closed: 5 May 2024 9 recommendations 14 conclusions 1 report

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 DB benefits reduced from 3.5 … Show more

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Reports

1 report
Title HC No. Published Items Response
Third Report - Defined benefit pension schemes HC 144 26 Mar 2024 23 Responded

Recommendations & Conclusions

8 items
1 Conclusion Third Report - Defined benefit pension … Accepted

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 acknowledges that its figures do not fully reflect the effects … Read more

Government response AI 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.
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Department for Work and Pensions
4 Conclusion Third Report - Defined benefit pension … Accepted

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 the Funding Code would force them to de-risk unnecessarily, increasing … Read more

Government response AI 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.
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Department for Work and Pensions
6 Conclusion Third Report - Defined benefit pension … Accepted

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 the short-term. Well-funded schemes should also be supported to run … Read more

Government response AI 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.
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Department for Work and Pensions
9 Conclusion Third Report - Defined benefit pension … Accepted

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 can be particularly the case for those with rights built … Read more

Government response AI 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.
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Department for Work and Pensions
11 Recommendation Third Report - Defined benefit pension … Accepted

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 continue to work with the industry to create an environment … Read more

Government response AI 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.
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Department for Work and Pensions
15 Recommendation Third Report - Defined benefit pension … Accepted

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 register to report annually on the number of trustees who … Read more

Government response AI 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.
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Department for Work and Pensions
16 Recommendation Third Report - Defined benefit pension … Accepted

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 to the consultation on pension Superfunds but there was no … Read more

Government response AI 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.
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Department for Work and Pensions
18 Conclusion Third Report - Defined benefit pension … Accepted

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 options rather than assuming this assessment is taking place. TPR … Read more

Government response AI 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.
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Department for Work and Pensions

Oral evidence sessions

6 sessions
Date Witnesses
10 Jan 2024 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 View ↗
29 Nov 2023 Louise Davey · The Pensions Regulator, Nausicaa Delfas · Financial Ombudsmen Service, Neil Bull · The Pensions Regulator View ↗
8 Nov 2023 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 View ↗
18 Oct 2023 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 View ↗
6 Sep 2023 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 View ↗
21 Jun 2023 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 View ↗

Who gave evidence

39 witnesses
WitnessOrganisationSessions
Adam Saron — 1
Barry Kenneth · Chief Investment Officer Pension Protection Fund 1
Bim Afolami · Economic Secretary to the Treasury HM Treasury 1
Brian Denyer · Senior Solutions Director – Pensions Abrdn 1
David Carson · Member of Steering Committee Hewlett Packard Pension Association (HPPA) 1
Dr Con Keating Brighton Rock Group 1
Fiona Frobisher · Head of Policy The Pensions Regulator 1
Harus Rai · Managing Director Capital Cranfield 1
Janice Turner · Founding co-chair Association of Member Nominated Trustees 1
Joe Dabrowski · Deputy Director Pension and Lifetime Savings Association 1
Katie Farrington · Director General, Disability, Health and Pensions Department for Work and Pensions 1
Laura Webster · Director of Personal Tax, Welfare and Pensions HM Treasury 1
Leah Evans · Chair of Pensions Board Institute and Faculty of Actuaries 1
Leonard Bowman · Partner and Head of Corporate DB Endgame Strategy Hymans Robertson 1
Louise Davey · Interim Director of Regulatory Policy, Analysis a… The Pensions Regulator 1
Luke Webster · CEO The Pension Superfund 1
Mr Derek Benstead · Senior Consultant First Actuarial LLP 1
Mr John Ralfe — 1
Mr Martin Hunter · Head of Integrated Funding Railpen 1
Nausicaa Delfas · Interim Chief Executive and Chief Ombudsman Financial Ombudsmen Service 1
Neil Bull · Head of Investment The Pensions Regulator 1
Neil Couling · Director General Change and Resilience, and Unive… Department for Work and Pensions 1
Neil Walsh · Pensions Officer Prospect 1
Nick Coleman · Member BP Pensioner Group 1
Oliver Morley · Chief Executive Officer Money and Pensions Service 1
Paul Maynard · Minister for Pensions Department for Work and Pensions 1
Peter Schofield · Permanent Secretary Department for Work and Pensions 1
Professor Iain Clacher · Professor of Pensions & Finance and Director, Cen… University of Leeds 1
Richard Nicholl · member of the Executive Committee Pensions Action Group 1
Robert Smith · Member of Council Royal Ordnance Pensioners Association 1
Roger Sainsbury · Founder Deprived Pensioners Association 1
Sara Protheroe · Chief Customer Officer Pension Protection Fund 1
Serkan Bektas · Head of Client Solutions Group Insight Investment 1
Simon True · CEO Clara-Pensions Limited 1
Sir Steve Webb · Partner Lane, Clark & Peacock 1
Steve Hitchiner · President Society of Pension Professionals 1
Terry Monk · Member of the Executive Committee Pensions Action Group 1
Tracy Blackwell · CEO Pension Insurance Corporation plc 1
Yvonne Braun · Director of Policy, Long-Term Savings, Health and… ABI 1

Correspondence

15 letters
DateDirectionTitle
4 Dec 2024 — Statement from the Office of National Statistics (ONS), the Pensions Regulator …
13 Mar 2024 — Correspondence with The Pensions Regulator relating to the impact on Defined be…
6 Mar 2024 — Correspondence with the Minister for Pensions relating to Defined Benefit pensi…
7 Feb 2024 — Correspondence from TPR relating to Defined Benefit pension schemes with Liabil…
31 Jan 2024 — Correspondence with Economic Secretary to the Treasury relating to Defined bene…
24 Jan 2024 — Correspondence with the Economic Secretary to the Treasury relating to Defined …
10 Jan 2024 — Correspondence with the Minister for Pensions relating to meeting with the Pens…
10 Jan 2024 — Correspondence with the Office for National Statistics relating to Defined bene…
10 Jan 2024 — Correspondence with the Minister for Pensions relating to Proposed Scheme Fundi…
13 Dec 2023 — Correspondence with the Pension Protection Fund relating to Defined benefit pen…
29 Nov 2023 — Correspondence with Pension Protection Fund relating to Defined benefit pension…
8 Nov 2023 — Correspondence from Clara-Pensions relating to defined benefit pension schemes
8 Nov 2023 — Correspondence with the Pension Protection Fund relating to Pension Protection …
25 Oct 2023 — Correspondence with the Pension Protection Fund relating to defined benefit pen…
18 Oct 2023 — Correspondence with the Prudential Regulation Authority relating to Defined ben…