Policy paper

Defined benefit pension scheme surplus payments to members

This measure allows defined benefit pension schemes to make authorised surplus payments to members.

• From: HM Revenue & Customs
• Published: 13 July 2026

Documents

Surplus payments to members in a defined benefit pension scheme

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Draft legislation

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Draft legislation (accessible version)

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Explanatory note

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Details

This measure introduces a new authorised member surplus payment from registered defined benefit occupational pension schemes.

It allows trustees to make discretionary payments direct to eligible members from scheme surplus, which will be taxed as pension income. This will apply to payments made on or after 6 April 2027. 

The government would like feedback on the draft legislation. Feedback should be submitted by 7 September 2026 by email: policypensions@hmrc.gov.uk.

Published 13 July 2026