Asked by: Baroness Spielman (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government what assessment they have made of their modelling on superfunds, published in June 2025, which suggested that a profit extraction trigger of around 150 per cent of the Authorisation Capital Requirement provided an appropriate balance between member security and commercial viability in developing the permanent legislative framework for superfunds; whether they are considering alternative profit extraction thresholds; and when they expect the superfund legislative and consolidation framework to be finalised.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
The Government is considering options for the profit release threshold. We will set out our proposals in the consultation on the draft superfund regulations, which we expect to publish early next year. Following consultation and subject to Parliamentary approval, we anticipate that the legislation will come into force in 2028. Until the superfunds regulations and the code of practice is in place, superfunds will continue to operate under The Pensions Regulator’s interim superfund regime.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government whether surplus held within a defined benefit superfund may, under the current regulatory framework, be released to enhance members' benefits; and what assessment they have made of whether the proposed permanent legislative framework should facilitate such surplus distributions.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
In the same way as any other defined benefit scheme, the rules of a superfund scheme will determine how and whether surplus assets can be used to enhance scheme benefits for members. Typically, the trust deed and rules of the scheme will contain an augmentation power or similar which can be used to increase benefits in some circumstances.
Within the permanent superfund framework, we expect innovation and different models will emerge. Some may offer to share surplus funds with members.