Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Defined benefit definition

What does Defined benefit mean? In legal practice, defined benefit (DB) refers to occupational pension benefits fixed by a formula—commonly based on pensionable salary (final salary or career average) and length of service—rather than by the amount of contributions paid or investment performance. The term is used and recognised in UK pensions legislation (including the Pensions Acts and related regulations) and in Ireland (Pensions Act 1990), with broadly consistent usage across England & Wales, Scotland, Northern Ireland and Ireland. Key features include: the sponsoring employer bears the funding and investment risk; trustees obtain regular actuarial valuations; and any deficit must be addressed through...

DB occupational pension scheme surpluses: ownership and utilisation on ongoing and wind-up; trust deed primacy, key case law, and proposed UK surplus-extraction reforms

Published by a LexisNexis Pensions expert

Practice notes

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FORTHCOMING DEVELOPMENT:

At a roundtable in the City of London on 28 January 2025 with leaders of the UK’s largest companies, Prime Minister Keir Starmer and Chancellor Rachel Reeves set out proposals to ease constraints on Defined benefit (DB) pension schemes that have strong Surpluses, to release capital for investment in UK firms as part of the Labour government’s broader drive to spur economic growth. The government envisages that, where trustees consent to share a slice of the scheme’s surplus with the employer, the employer could channel these monies into its core operations and/or offer extra benefits to members. The reforms seek to unlock an estimated £160 billion presently sitting in surplus across roughly 75% of schemes. Legislation is proposed to permit all DB schemes to amend their rules to allow surplus extraction, subject to trustee–employer agreement. The government, however, stresses that any changes will be introduced with suitable safeguards to protect member benefits...

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Wyn Derbyshire

gunnercooke LLP

Wyn is a partner at gunnercooke LLP and specialises in pensions, trust and employment law in all industry sectors, dealing with the transactional, advisory and documentation aspects.He also has wide experience of the pensions implications of heavyweight corporate transactions and flotations, the issues arising from the establishment and merger of pension schemes, and sex equalisation and other discrimination issues in respect of benefits provided by pension schemes. In addition, he provides advice to pension scheme trustees generally.Recent transactions include advising Amcor on pension matters relating to the acquisition of Alcan business and the acquisition of Northern Foods PLC by Boparan Holdings.He is a co-author (with Stephen Hardy and Stephen Maffey) of TUPE: Law and Practice, published by Spiramus Press (now in its 4th edition), and co-author (with Stephen Hardy and David Wicks) of Money & Work, published by Spiramus Press in August 2007. He has also...

Web page updated on 21/05/2026

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