The Department for Work and Pensions (DWP) has confirmed in a recent press release that funding levels in the defined benefit (DB) pension sector have reached a record high, resulting in the value of scheme assets now exceeding the benefits to members.
What's happening?
The last time that schemes enjoyed a surplus (albeit, short-lived) was in the 1990s and given the time that has passed since then, the industry has been pressing the government to make proposals on how to deal with the surplus. This affects a large proportion of the DB pensions market, with three in four schemes now considered to be in surplus.
What impact has it had?
This is good news for trustees, employers and members alike. The DWP has recorded that employers are now making reduced deficit payments of over £10bn per year, which frees up those funds to be used for all manner of projects, such as supporting higher wages for employees, investing in the business, making investments or paying a return to shareholders.
