The Pensions Regulator (TPR) has produced guidance for trustees and employers in the UK to help them consider the range of new models and options available to them in endgame planning.
The guidance explores options from appointing a professional trustee to considering a superfund, and sets out some factors trustees should consider, with several case studies providing examples of the questions trustees should be asking themselves.
TPR said it is “critical” that trustees take advice and undertake an appropriate level of due diligence, think about the different risks and opportunities, and document the steps taken when making any decisions.
The regulator highlighted that while the path to buyout is “well-trodden”, running on and potentially releasing surplus is a new consideration for many defined benefit (DB) pension funds.
It said that for those schemes with scale and high governance standards, that have the right combination of employer covenant strength and funding level, it could be an option to consider.
It acknowledged that surplus release won’t be right for everyone, but it is “right” that well-run, well-governed and well-funded schemes can consider releasing surplus.
The regulator urged pension funds to have documented policies regarding their long-term objectives and endgame options, including surplus, particularly if releasing surplus could strengthen the employer covenant and enhance member benefits.
Recently, the government set out its intention to reform the law in this area.
Until then, TPR said the current rules will apply, which are different in the case of an ongoing scheme compared to a scheme in wind-up.
Jonathan Griffith, partner and head of endgame innovation at LCP, said: “This guidance follows hot on the heels of the government’s policy announcements last week on changes to the rules around DB surplus distribution, and with the new Pension Schemes Bill expected imminently.”
Griffith said that there has never been so much choice and flexibility in DB endgame planning. “While clearly a good thing, this means that trustees and sponsors now have much more to consider when reviewing their scheme’s endgame strategy.”
He welcomed the regulator’s call for pension funds to consider the right options for their schemes and members rather than going down a route that may not meet their objectives.
“The guidance on running a pension scheme is especially timely in light of the government policy announcements relating to DB surplus, and there the baton now passes to trustees and sponsors to plan for the anticipated new rules and guidance,” he added.
“While we have implemented many run-on and surplus sharing agreements to date under current guidelines, we expect to see even more focus in this area under the government’s new proposals,” he said.
James Patten, partner in the UK endgame strategy team at Aon, said the regulator has placed a “strong” emphasis on the importance of collaboration between employers and trustees when considering endgames, as well as recognising the need to uncover objectives and scheme circumstances before evaluating the most appropriate endgame for a scheme.
“Surplus is likely to come under increasing focus from employers and member groups”
James Patten, partner at Aon
He said: “We endorse that approach and the importance placed on carrying out a full risk assessment of the options that are more suitable for the scheme. We see modelling as fundamental to supporting schemes with these crucial strategic decisions.”
Patten also welcomed TPR’s encouragement to document run-on strategies through comprehensive framework agreements and to develop policies on surplus sharing.
“While the majority of schemes are now in surplus, our 2025 Endgame survey showed only 17% of schemes have formulated a view about how surplus will be shared between members and the sponsoring employer in future,” he said.
“Surplus is likely to come under increasing focus from employers and member groups, whether or not a scheme chooses to run on or buy out. Developing a clear policy now will help reduce the likelihood of challenge and regret risk in future,” he noted.
In addition, Patten said it is helpful that at a point where the government is also exploring the idea of a public consolidator for small schemes, it’s helpful that TPR has noted that solutions already available in the insurance market for such schemes – developed by insurers and advisers – can accelerate the route to settlement.
“This is consistent with our experience – the current market for small schemes is particularly competitive,” he said.
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