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Millions of pensions pots 'at risk' from employers taking 'surplus' from final payA campaign group as urged "ministers to think again" over the proposed plansCommentsNewsChristian Abbott
Audience Writer11:39, 30 May 2025Pension pots could exposed to change under new minister plans(Image: inyourArea) Pensioners have been warned their retirement pots could be "at risk" from a
new plan from Chancellor Rachel Reeves.
The proposed new reforms could let employers take a "surplus" from final salary pension schemes.
There are claims this would unlock billions in funds for companies to invest and grow, while also boosting pension rewards and pay.
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Ministers have argued that the move would allow for additional investment to boost the economy, while also boosting pension pots for millions of Brits.
However, the move has been criticised for potentially leaving retirement funds exposed to discourse and change.
Article continues below The Pension Security Alliance, a new group bringing together pension providers, insurers and campaigners, warned: “Pension schemes are not piggybanks for others to
dip into.”
They added that any withdrawal of surplus funds “before members’ benefits have been secured runs the risk of those schemes running short of money if financial conditions change. In that
case, some schemes could collapse.”
“We urge ministers to think again.”
One member of the group, Dennis Read of Silver Voices, said: “If a company has cash flow problems it will be tempting to raid the pension fund, claiming that the purpose is investment, so
leaving the scheme underfunded and unstable if the company collapses.”
Essentially, pension schemes with more in assets than needed to cover promised payouts could be allowed to return the excess to employers.
However, any cash taken from schemes would face a 25% tax.
John Ralfe, a leading pensions consultant and chair of two schemes, said: “The detailed regulations that ministers are proposing must make sure member security is the absolute priority.
"Surpluses must be defined on a tough basis. Scheme assets must also match liabilities to minimise the risk of market movements causing any future deficit.”
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