The new Pensions Schemes Bill, which was presented to parliament earlier this month,  gives trustees new powers to amend scheme rules so that surplus can be returned to employers — subject to funding safeguards. However, it does nothing to empower trustees to use surplus to fund discretionary increases for members, such as those with pre-1997 pension service.

This contradicts government and legal firm statements that say trustees will be allowed to use surplus to benefit members and company — and amounts to a serious moral hazard.

Is this a legal loophole – the law will enable Trustees to provide employer benefit from surplus, but does not allow Trustees to provide benefit to members from surplus?

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The HPPA Committee