Pension Scheme Surpluses
Monday, 12 October 2026
Contributions
Clive Jones (Wokingham) (LD)Liberal Democrat
9. What assessment he has made of the potential merits of requiring pension scheme surpluses in defined-benefit schemes to be used to improve pensions for members before surplus funds can be released to sponsoring employers.
The Minister for Pensions (Torsten Bell)Labour
The Government’s reforms provide greater flexibility for well-funded defined-benefit pension schemes to share surplus with employers and to benefit members. Scheme trustees, who must act in the interests of scheme beneficiaries, are best placed to determine the appropriate use of any surplus for their individual scheme. Trustees will agree how members can benefit, working with sponsoring employers.
Is it not the case that nothing in law stops the Government requiring pre-1997 pensions to be restored before surplus goes back to employers, and that the only reason it is not happening is that the Minister has decided that it should not?
I thank the hon. Gentleman for his question; he and I have met and discussed this issue on many occasions. Around three quarters of schemes already provide some pre-1997 indexation, but the hon. Gentleman is right to point out the strength of feeling on this. I have met with many MPs and scheme members, including those in south Wales who have been affected by lack of pre-1997 indexation on their defined benefit schemes. It is separate from the changes that we have already introduced for the Pension Protection Fund’s indexation. Trustees need to be in the driving seat. Employers will have no direct access to a scheme’s surplus. The flexibilities we have put in place through the Pension Schemes Act 2026 and the guidance being provided by the Pensions Regulator are already changing the nature of the discussion between trustees and employers, and will lead to a step change in this area.
Mr SpeakerSpeaker
I call the shadow Minister.
Mr Peter Bedford (Mid Leicestershire) (Con)Conservative
It did not sound as though the Minister could commit to improving outcomes for pensioners. That is no surprise given this Government’s record: they cut the winter fuel payments, undermined incentives to save into pensions through the salary sacrifice scheme, and dragged pensions into the scope of inheritance tax. The Prime Minister’s announcement at the Labour party conference created yet more uncertainty for those in or approaching retirement. Will the Minister give a commitment to the House that there will be no further policies undermining pensioners’ prospects and damaging their retirement?
Although I listened closely to much of the Conservative party’s conference—not quite all of it, but lots of it—I am still not clear what its policy is on the triple lock or on many other things in the pensions space. I have been paying a lot of attention, and what I have learned is that the shadow Foreign Secretary calls the triple lock a Ponzi scheme and the previous shadow Chancellor calls it completely unsustainable. The shadow Secretary of State knows she has a ridiculous position on reform of the state pension. This Government will put the state pension on a sustainable basis and address the other big challenge of ensuring an adequate private pension system. That is what the Pensions Commission will do.
Source: UK Parliament Hansard API. Debate ID: 5413432.