TPR data sheds light on impact of Truss mini-budget with major improvements in DB funding

Unsplash - 31/07/2025 - retirement

The Pensions Regulator (TPR) publishes today its Occupational defined benefit scheme funding analysis 2025, looking at scheme valuations from 22 September 2022 to 21 September 2023.

The statistics show that overall, 62% of these schemes (tranche 18) reported a surplus on the Technical Provisions (TP) funding basis – a significant increase on the 27% in surplus three years previously (tranche 15) and continuing the trend seen last year when 47% of tranche 17 schemes were in surplus.

The average funding level had increased by 15% over the three year cycle (104% in tranche 18 (median: 103%), compared to 89% in tranche 15 (median: 90%)) and average recovery plan lengths had reduced by 1.9 years between tranche 15 and 18 (median: 1.5 years) from 6.3 to 4.4 years (medians 5.3 years to 3.8 years).

The average buyout funding level had improved from 68% in tranche 15 to 91% in tranche 18 (also a significant increase compared to the 80% reported for tranche 17). 

David Hamilton, Chief Actuary at leading independent consultancy Broadstone:

“The usual time lag associated with this analysis means that this reinforces recent messaging rather than throwing up too many surprises. However, it does formally evidence the step change improvement in funding seen by many DB schemes following the Truss mini-budget.

“Based on the figures, more than two thirds of DB members should now have been in a scheme with a funding surplus at their last valuation (with increasingly prudent approaches also being built in).  We expect this level of security to continue to increase, which is fantastic news for members, although it may be hidden slightly in future analysis by changes to the new funding regime. 

“Much improved funding levels, together with a maturing DB population – over 60% of schemes had more than half their liabilities relating to pensioner members, almost 14% higher than last year’s analysis – have been key themes for several years, contributing heavily to the growth in buyout transactions, which is likely to continue for some time.

“However, perhaps the most surprising statistic was that around 250 schemes still needed to extend their recovery plans despite the general funding improvements, showing that even in a ‘good’ year a significant number of schemes will face specific challenges. 

“Continuing to understand risks, monitor developments and have contingency plans in place remain invaluable tools to trustees in managing their schemes.”

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