Member

Amendments 23, 27, 28, 29 and 30 from my noble friend Lord Davies seek to replace references in the relevant legislation to scheme “surplus” with references to scheme “assets”. I thank my noble friend for the helpful reminder that surplus in DB schemes relies on the balance of assets and liabilities, which may change. But our changes maintain trustee discretion over surplus release, which can happen only where the surplus scheme is funded to a very prudent funding threshold and with actuarial certification that the scheme is in surplus—it is only on that prudent basis that surplus can be released, ensuring that member benefits are protected. In addition, I am afraid that this change would have unintended legislative consequences. As my noble friend mentioned, the word “surplus” is embedded within existing legislation. The reference to “surplus” in Section 37 is well understood in the industry and we think that changing it as he suggests would be confusing.