UK-based pensions fund consultancy Pensions for Purpose has welcomed a new government proposal to give more flexibility to how UK defined benefit pension schemes are managed. At the moment, only pension schemes that passed a resolution before 2016 may access their fund surplus, which means that a lot of money cannot be invested. Prime Minister Keir Starmer and Chancellor Rachel Reeves outlined plans to lift this restriction at a roundtable of business executives. “Allowing surplus extraction could encourage trustees to take a longer-term view, moving beyond a narrow focus on buyout timelines,” said Laasya Shekaran, Director, Pensions for Purpose. “This shift could drive greater appetite for impact and more sustainable investing, which may come with higher risk/return profiles and illiquidity but delivers systemic sustainability benefits over the long term.” Government data suggests that 75% of UK defined benefit pension schemes, worth £160 billion, are in surplus at the moment.
