There is strong backing for pension trustees to be at the "heart of decisions" on releasing defined benefit (DB) pension scheme surpluses, a survey from the Association of Consulting Actuaries (ACA) has found. .

The survey, which received responses from ACA members, follows the ACA paper Unlocking DB Pension Scheme Surplus released in February 2025.

Reflecting the provisions of the 2025 Pension Schemes Bill, which makes clear there is no obligation to release surpluses, 63 per cent of survey respondents agreed with this approach.

However, opinions varied by professional focus, as 74 per cent of trustee advisors supported the non-mandatory stance, compared to 36 per cent of corporate advisors and approximately 44 per cent of those advising both.

When asked what the minimum level at which surplus should be released at trustee discretion, 61 per cent favoured low dependency or a margin above low dependency.

In particular, 68 per cent of respondents believe there is a minimum scheme size that is suitable for DB surplus release, with a scheme size of £100 million being the most often quoted minimum size. 

The ACA suggested that the responses support the view that any legislation doesn’t necessarily need to be fit for purpose for the full universe of the smallest schemes.

The survey also showed that ensuring benefits have a very high probability of being paid in full should remain at the centre of any surplus release regime.

Over 80 per cent of respondents felt that the top five most important factors trustees should consider when considering surplus release should include: the probability of full benefits provided, prudence in liabilities and covenant strength.

In terms of what featured the lowest as the most important factors trustees should consider when considering surplus release, were existing pension increases, Pension Protection Fund (PPF) funding level and sponsor use of surplus.

The ACA said that this finding was consistent with the view in its paper released in February which found that it would be very difficult for trustees to police the sponsor’s use of surplus.

ACA chair, Stewart Hastie, said that "another interesting area" is the assessment of the key factors that trustees should consider before releasing surplus, which are relevant to new guidance from the Pensions Regulator that is anticipated to follow once the Pensions Schemes Bill receives Royal Assent and the secondary legislation is put in place.

“The range of answers in this area support the decision to release surplus being specific to the circumstances of each scheme and the sponsor covenant supporting it,” he added.

“Despite some recent scaremongering, a scheme-specific approach helps to recognise that well-funded schemes with lower risk asset strategies and strong covenant protections have very significant financial protections already in place.

“And when combined with the strong legislative and regulatory protections, that have built up over the last two decades, can provide a sound platform for schemes to run on and release surplus for the benefit of members, employers and their current and future workers.”

Additionally, the research revealed that over 75 per cent of respondents think that if PPF compensation is increased to broadly 100 per cent of benefits, trustees would be more inclined to consider surplus release.

However, less than 25 per cent of respondents thought that trustees and sponsors would be willing to pay a material premium to pay for this.

Hastie said that for the time being, the government appears to be addressing the potential constraints in scheme rules but is “reluctant to move on other measures that could incentivise the way in which surplus is used”.

“It is hoped that as the bill passes its second House of Commons stage this week and goes into Committee, the importance of such incentives will be debated,” he continued.  

“Many trustee boards will likely find it easier to agree appropriate surplus release if the government does permit these incentives and greater flexibilities for pension scheme members to benefit from surplus.”

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