Member Article · August 2026

The Benchmark That Wasn't

In June, the Pensions Regulator published a case study in which trustees secured half of a surplus release for members. In August, it quietly added a clarification: those figures are not benchmarks, and it has set no expectations at all. What changed, what didn't — and why it proves the point we made to the Government.

Published by J&J Pensioners Network | August 2026

In short: On 10 June 2026, TPR published a statement on the new surplus release flexibilities, including two illustrative case studies — in one, trustees agreed that 20% of a release would fund member benefit increases; in the other, 50%. Adviser firms promptly treated the case studies as guides to practice. On 21 August, TPR updated the statement to say its figures are “not intended to be benchmarks” and that it “has not set expectations regarding either the sharing of surplus or the level of value that may be released.” The statement is now labelled interim, to be replaced by guidance consulted on at the end of 2026. The principles that matter to pre-1997 pensioners — including whether members have a reasonable expectation to share in surplus where discretionary benefits were regularly granted — remain in the statement, unchanged. But the episode shows how quickly guidance can soften. Protection for members needs to sit in the regulations themselves — which is exactly what we argued in our consultation response.

What TPR said in June

Alongside the Government's draft surplus regulations, the Pensions Regulator published a statement on 10 June 2026 setting out how trustees should approach surplus release. It listed the factors trustees might weigh when considering whether members should benefit — among them the impact of inflation on members' standards of living, the extent of indexation provided under the scheme rules, whether benefits have been reduced or capped in the past, and whether members have a reasonable expectation to share in surplus, especially if discretionary benefits have been regularly granted. For a scheme whose discretionary increases date back to at least 1984 and stopped in 2014, every one of those factors speaks directly to us.

The statement also included two illustrative case studies. In the first, trustees negotiating a release under current law required 20% of it to fund member benefit increases. In the second — a scheme using the new statutory override, once in force — trustees secured 50% for members, a funding buffer before any release, payment in instalments, and security over employer assets.

How the industry read it

Adviser firms read those case studies as more than illustrations. XPS Group — which, members may note, is also our own Plan's administrator — published a briefing within days describing the two case studies as potentially “important reference points for trustees.” That was a reasonable reading: when a regulator publishes worked examples showing trustees securing 20% and 50% of releases for members, trustees and employers alike will take note of the numbers.

What changed on 21 August

Ten weeks later, TPR updated the statement. The update note says simply: “clarifications added to introductory paragraphs.” We compared the two versions line by line. Two things were added:

“Figures used within the case studies are not intended to be benchmarks. As a regulator we have not set expectations regarding either the sharing of surplus or the level of value that may be released.”

And the statement is now expressly labelled an interim statement, to be replaced by fuller guidance that TPR will consult on towards the end of 2026. Everything else — every factor, both case studies, every principle — is word-for-word unchanged.

We make no claim about who asked for the clarification, or why. The regulator has its own reasons for avoiding anything that could be quoted back at it as a settled expectation. Members may draw their own conclusions about the direction of travel. What is beyond dispute is the sequence: worked examples published in June, treated by advisers as reference points, and disclaimed as benchmarks in August.

What didn't change

It is worth being just as clear about what survived. The statement still anticipates that both employers and members may expect to benefit from a release. It still directs trustees to consider inflation's impact on members, the extent of indexation, past benefit caps, and the reasonable expectation created by a history of regularly granted discretionary increases. It still tells trustees to check that historic scheme amendments and GMP issues have been resolved before releasing surplus, and to document their decision-making “in case of any future challenge by the sponsoring employer or scheme members.” TPR has disclaimed the numbers. It has not disclaimed the principles.

Why it matters

Here is the uncomfortable lesson. The strength of member protection in the new surplus regime currently rests on two things: trustees' general duties, and regulatory guidance. Between June and August, before the regime has even come into force, that guidance visibly softened at its most quotable point. Guidance can be clarified, revised, replaced — and this statement, now formally interim, will be. Regulations cannot be softened by a website update.

That is precisely why our response to the Government's consultation argued that member protections — consultation before payment, evidence that historic indexation gaps have been considered, reasons where members receive nothing — must be written into the regulations themselves, not left to guidance. This episode is the argument, played out in real time.

What we will do

TPR's consultation on the full guidance at the end of 2026 is the next formal opportunity, and the Association intends to respond. The June-to-August sequence documented here will form part of that response: it is now evidence, not commentary. In the meantime, when we cite the statement, we will cite it accurately — interim, updated, principles intact — and we would encourage members to do the same.

The Government's consultation has now closed. It closed on 2 September 2026. Our submission to the Government is published in full. We await the Government’s formal response, expected later this year, and will report on it when it lands.

Source: The Pensions Regulator, “New defined benefit surplus flexibilities,” published 10 June 2026, updated 21 August 2026; XPS Group, “From Principles to Practicalities,” June 2026.