The government must place surplus management at the heart of reforms outlined in the Pension Schemes Bill, the Association of Professional Pension Trustees (APPT) has urged, warning that the framework must combine flexibility with robust protections for savers.

In its submission to the Public Bill Committee, the APPT supported the principle of surplus release where schemes are demonstrably well-funded, advocating for a statutory override to address inconsistencies in trust deeds and rules.

However, it stressed that surplus extraction should only be permitted at high levels of funding security, such as a full buyout, and should always be subject to trustee consent.

The association also called for safeguards, including independent actuarial certification, member disclosure, and oversight from The Pensions Regulator (TPR) in large or complex cases.

The APPT further pressed the government to review the tax regime, describing current treatment as a “significant disincentive” to responsible management, and suggested conditional relief where surpluses are used to enhance member benefits or transferred to master trusts.

“Professional trustees are ready to play a central role in implementing a fair and transparent surplus framework that balances security, flexibility, and economic contribution,” the association stated.

Beyond defined benefit (DB) reforms, the APPT supported a universal value-for-money framework across trust- and contract-based defined contribution (DC) schemes, while cautioning against an excessive focus on cost.

It also welcomed moves on small pot consolidation and guided retirement products, but stressed the need for proportionate safeguards and clear trustee responsibilities.

The Investing and Saving Alliance (TISA) also responded to the Bill, warning that default pension benefit solutions (DPBS) must not lock members into inappropriate or irreversible options, such as annuities for those with short life expectancies.

It emphasised that defaults must retain flexibility, allowing savers to "move away" if they choose to do so.

TISA head of retirement, Renny Biggins, further cautioned that scale requirements applied indiscriminately could force out well-performing smaller multi-employer schemes while leaving average single-employer schemes untouched.

This, he warned, risked “the creation of a market dominated by a few very large providers, which would reduce competition, innovation and consumer choice”.

Biggins added that continued collaboration between government and industry will be vital to the bill’s success, given the complexity of the reforms.

“This bill contains a very high number of measures that address complex areas in which getting the detail right is absolutely crucial,” he said.

Their responses follow earlier submissions from Pensions UK and the Association of Consulting Actuaries (ACA), which warned that mandation and reserve powers could undermine fiduciary duty and raised broader concerns that aspects of the bill could introduce risks to savers.

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