PASA has responded to the Department for Work and Pensions consultation, Surplus Flexibilities for Defined Benefit Pension Schemes: Unlocking Value for Employers and Scheme Members.
The consultation considers the framework and conditions for payments of surplus from defined benefit pension schemes to employers.
From an administration perspective, PASA doesn’t expect the proposed arrangements for employer surplus payments to create significant operational concerns. Our response therefore focuses on the practical administration of member surplus payments, particularly where an entitlement may need to be maintained for many years before payment can be made.
We’re asking for greater clarity across the full lifecycle of these entitlements, including:
- the treatment of deferred entitlements on death, transfer and divorce
- the timing of payments and member communications
- reporting requirements to The Pensions Regulator
- ongoing disclosure requirements
- how member surplus entitlements should be reflected on pensions dashboards
- the records and evidence schemes will need to retain over the long term
- whether a de minimis approach could reduce disproportionate administration costs for very small entitlements
Clear and consistent requirements will help trustees and administrators implement the new flexibilities effectively and support good outcomes for members.
PASA is grateful to the members of its Industry Policy Committee who contributed to the response.
Read PASA’s full consultation response here:
DWP Consultation – Surplus Flexibilities for Defined Benefit Pension Schemes FINAL
