UK Workplace Pensions: DB Roadmap update and surplus consultation

On 13 July 2026 the Government published its Workplace pensions: an updated roadmap. For DB schemes this included updates on surplus, superfunds and PPF. (DC aspects are covered in our separate e-alert.)

Surplus payments to members

On the same day, HMRC launched a consultation on new rules to allow Defined benefit pension scheme surplus payments to members.

New regulations will allow trustees to make discretionary payments direct to eligible members from scheme surplus, to be known as “authorised member surplus payments” within HMRC’s registered pension scheme rules. The measures are drafted to apply to payments made on or after 6 April 2027. 

Younger members will not be able to receive an immediate payment and would generally need to wait until they become eligible to access their scheme benefits before receiving a payment. Payments can also be made to dependants, regardless of age, after a member’s death.

A payment will count as an “authorised member surplus payment” if five conditions are met at the time members are given the right to the (future or present) payment:

1. The award of the payment is at the discretion of the trustees
2. The award is to be paid out of defined benefit (DB) assets
3. The scheme is an occupational pension scheme and not treated as an “investment-regulated pension scheme
4. The scheme is not currently being wound-up
5. The payment would have been an authorised employer surplus payment if it had instead been paid to the employer (which itself would need to comply with DWP requirements – see below)

The payments will be taxed as pension income but will not count towards members’ annual allowances or their lump sum (and death benefit) allowances.

The consultation runs to 7 September 2026. Legislation is expected to be included in the Finance Bill which would be published following the Autumn Budget.

The DWP is already separately consulting on the non-HMRC aspects of employer surplus payments. That consultation runs to 2 September 2026 – see our Surplus release: Draft regulations and Regulator’s statement.

The updated roadmap indicates that the DWP will publish its response to these consultations between October 2026 and January 2027, with both DWP and HMRC regulations coming into force together on 6 April 2027, along with TPR and FRC guidance.

Superfunds

The Government cites that they wish to create “more space to learn from TPR’s interim regime and react to market changes”. Consequently, it has pushed back the timetable and intends to consult on Superfund regulations in early 2027. The updated roadmap continues to envisage full implementation in 2028, with the regulations and TPR Code now expected to come into force in October 2028.

PPF increases

A week ago, the PPF announced that it was contacting members who are eligible to receive pre-97 indexation advising them that the first increases are expected to be payable on 1 January 2027. The roadmap confirms this date. There will be a targeted consultation with key stakeholders over the summer. Changes to the legislation will also affect eligible DB schemes outside of the PPF as the introduction of pre-97 indexation will affect the PPF liabilities for DB schemes that provided for pre-97 indexation.