Select committee: Work and Pensions Committee
Recommendation 16
Third Report - Defined benefit pension schemes
Published 26 Mar 2024
Paragraph 125
Addressed to Department for Work and Pensions
Work and Pensions Committee Defined benefit pension schemes All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
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 Bill in the King’s Speech at the start of this parliamentary session. It will be challenging for Superfunds to get off the ground without legislation. The Government should consult on the detailed proposals of the Superfunds legislative framework to protect member benefits and then introduce primary legislation for pension Superfunds as soon as possible.
From: Work and Pensions Committee, Third Report - Defined benefit pension schemes (HC 144), paragraph 125, 26 March 2024
Government response
The government responded to the whole report on 30 April 2025 (deadline 26 May 2024).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government says it has "addressed all of the Committee's recommendations", supporting some DB reforms and committing to consult or respond on others, while declining to make certain changes, such as replacing TPR's PPF objective or offering specific redress to AEAT members.
- On surplus, the government committed on 28 January 2025 to give trustees and sponsoring employers the flexibility to use DB surplus, and says it "will respond formally" to the 'Options for Defined Benefit Schemes' consultation "in the Spring".
- It agrees it is important that regulation does not make schemes too risk averse, but says "we do not believe that TPR's PPF objective is a key factor in employer decision-making", and the review it cites "did not recommend changing this objective".
- On the PPF levy, it announced on 30 January 2025 that it "will consider" giving the PPF Board greater flexibility to adjust the levy. On pre-1997 indexation for PPF and FAS members, it says Ministers "continue to take advice on options" and that it "will provide further detail in due course".
- On governance, it intends to run a public consultation "later this year", including on accreditation and support for lay trustees, and says it is introducing a Superfund authorisation framework in the forthcoming Pension Schemes Bill. On the AEAT scheme it states: "There are no plans to offer specific redress to AEAT members."