Broadstone urges Government to protect members under DB surplus reforms

Broadstone has urged the Government to balance member protections with practical usability as it considers reforms allowing greater flexibility over defined benefit (DB) pension scheme surpluses.

The consultation on DB surplus extraction closes on 2nd September.

Broadstone said decisions on extracting surplus should not be considered in isolation, with trustees needing confidence that payments remain consistent with their long-term investment strategy.

It also called for supporting guidance from The Pensions Regulator (TPR) to place greater emphasis on operational readiness, including data quality, benefit accuracy and administration.

Broadstone said the regime should remain proportionate for smaller schemes and those seeking to release surplus regularly as part of a run-on strategy.

The consultancy also raised questions around how members should benefit when a surplus is released, calling for greater clarity over the role of benefit improvements and the balance between employer and member interests.

David Brooks, head of policy at Broadstone, said: “The Government’s objective of making run-on a credible option alongside buyout and consolidation is a positive step.

“However, the success of the reforms will depend on striking the right balance between member protection and practical usability.