In the statement, released yesterday (6 May), the watchdog said most schemes continued to see positive funding levels – estimating that 90% of schemes were in surplus on a technical provisions basis, 80% of schemes were in a surplus on a low dependency basis and 60% of schemes were in surplus on a buyout basis as at 31 December 2025.

TPR said it expected most schemes to

“be shifting their focus from deficit recovery to endgame planning”

– adding its guidance on new models and options in defined benefit (DB) pension schemes, published in June 2025, would support trustees when considering their endgame options.

The regulator’s statement said its experience to date reflected its estimate that around 80% of schemes should be able to meet fast track – a move it said would enable it to reduce the regulatory burden, as these schemes would be able to provide less information as part of their statement of strategy.

The funding statement also commented on legislation relating to surplus release included in the Pension Schemes Act 2026.

It said details on this would follow in regulations that the Department for Work and Pensions will be consulting on. Around the same time, the regulator said it would publish a statement providing early views on the issues trustees should consider around surplus release.

It said it would consult on more detailed surplus guidance later this year to sit alongside the final regulations, which are expected to come into force in 2027.

TPR executive director of market oversight Ben Gunnee said:

“DB funding has changed dramatically, and it’s prompting trustees and employers to rethink their endgame. run-on, superfund consolidation, buyout — whichever route you’re considering, the decisions you make now will shape members’ futures. The environment is shifting, and staying still won’t keep you ahead. We expect trustees to maintain their focus on long-term planning and ensure their scheme has a clear and well-evidenced endgame strategy.”

Yet, while the overall picture is positive, TPR said trustees should remain alert to wider economic and geopolitical uncertainty – noting that understanding the risks to investment strategies and employer covenants remains essential, particularly as schemes move closer to their long-term objectives.

The funding statement said:

“As a scheme’s funding position improves, covenant assessments should shift increasingly towards ongoing monitoring and managing downside risks, to ensure that progress towards the long-term objective is protected.

“A more detailed covenant assessment may still be required if funding levels are weaker, the scheme is large relative to the employer or high levels of risk are being taken.”

The regulator also commented on the potential impacts of cyber incidents – incidents it said have become an area of increasing concern for trustees and employers.

TPR noted:

“These issues can materially impact the employer covenant through impacts on their business activities, operations and supply chains. We expect trustees to monitor these risks, with the frequency and depth of monitoring proportionate to the circumstances of the employer and the scheme.”

In addition, TPR commented on current geopolitical and economic uncertainty.

It said:

“It remains essential to recognise the potential impact of ongoing macroeconomic uncertainty on both scheme investments and the employer covenant.

“Trustees should ensure that near-term liquidity and cash flow requirements are securely met, while maintaining an investment strategy that remains resilient to shifts in the economic environment and to the evolving risk appetite of both the trustee board and the employer.”

The funding statement added:

“Where these factors could have a material impact on an employer’s cashflows and prospects, trustees must consider whether the current level of risk the scheme is running remains appropriate. Where risk-taking is no longer supportable, trustees should adjust their journey plan to low dependency.”

The Pensions Regulator