Default retirement income solutions and defined benefit (DB) surplus reform top the industry’s priority list for the Pension Schemes Bill, according to a new Sackers poll of 62 trustees and employers.
More than a third (36%) of respondents selected default retirement income solutions, while just under a quarter (23%) opted for DB surplus changes. These options ranked higher than proposals such as small pot consolidation, DB megafunds and superfund legislation.
Sackers partner Janet Brown said the results highlighted growing interest in unlocking surplus as part of wider scheme endgame planning. The government’s proposals as currently worded would allow trustees to authorise a return of surplus without employer consent from 2027, but further clarity is still needed.
Brown noted that some schemes were already exploring innovative ways to use surplus without triggering a formal return to sponsors.
“We would really like to see the government allowing one-off lump sum authorised payments to members as we think this could have a real impact in unlocking negotiations over surplus.”
Janet Brown, Sackers
However, expectations need to be managed. Brown warned that proposed reforms were unlikely to generate the £160bn windfall cited by ministers, and practical progress may be slow.
“We would really like to see the government allowing one-off lump sum authorised payments to members… as we think this could have a real impact in unlocking negotiations over surplus,” she added.
The firm also encourages schemes to take a joined-up view of DB and defined contribution (DC) arrangements, noting that surplus assets could potentially be used to support DC contributions if future flexibility allows.
DC schemes, meanwhile, face a new requirement to provide decumulation solutions by 2027. Sackers partner Jacqui Reid said trustees must begin reviewing their approach now.
“Everyone has work to do here, whether you already have a solution and need to check how it will meet the new requirements, or if you don’t and will need to start from scratch,” she said.
She warned that without action on savings levels, structural reform will fall short.
“Unless we tackle the fundamental issue of adequacy and getting members to save more for their retirement, we are in danger of missing the point,” Reid concluded.
