diff --git a/subsys/pm/policy/policy_default.c b/subsys/pm/policy/policy_default.c
index 74a0443e6cd..eaf317d24cf 100644
--- a/subsys/pm/policy/policy_default.c
+++ b/subsys/pm/policy/policy_default.c
@@ -9,7 +9,6 @@
 #include <zephyr/sys_clock.h>
 #include <zephyr/pm/device.h>
 
-extern struct pm_policy_event *next_event;
 extern int32_t max_latency_cyc;
 
 const struct pm_state_info *pm_policy_next_state(uint8_t cpu, int32_t ticks)
@@ -30,27 +29,6 @@ const struct pm_state_info *pm_policy_next_state(uint8_t cpu, int32_t ticks)
 
 	num_cpu_states = pm_state_cpu_get_all(cpu, &cpu_states);
 
-	if ((next_event) && (next_event->value_cyc >= 0)) {
-		uint32_t cyc_curr = k_cycle_get_32();
-		int64_t cyc_evt = next_event->value_cyc - cyc_curr;
-
-		/* event happening after cycle counter max value, pad */
-		if (next_event->value_cyc <= cyc_curr) {
-			cyc_evt += UINT32_MAX;
-		}
-
-		if (cyc_evt > 0) {
-			/* if there's no system wakeup event always wins,
-			 * otherwise, who comes earlier wins
-			 */
-			if (cyc < 0) {
-				cyc = cyc_evt;
-			} else {
-				cyc = MIN(cyc, cyc_evt);
-			}
-		}
-	}
-
 	for (int16_t i = (int16_t)num_cpu_states - 1; i >= 0; i--) {
 		const struct pm_state_info *state = &cpu_states[i];
 		uint32_t min_residency_cyc, exit_latency_cyc;
diff --git a/tests/subsys/pm/policy_api/src/main.c b/tests/subsys/pm/policy_api/src/main.c
index bc3564bee8a..e61f44a8b36 100644
--- a/tests/subsys/pm/policy_api/src/main.c
+++ b/tests/subsys/pm/policy_api/src/main.c
@@ -304,68 +304,36 @@ ZTEST(policy_api, test_pm_policy_next_state_custom)
 }
 #endif /* CONFIG_PM_POLICY_CUSTOM */
 
-#ifdef CONFIG_PM_POLICY_DEFAULT
-/* note: we can't easily mock k_cycle_get_32(), so test is not ideal */
 ZTEST(policy_api, test_pm_policy_events)
 {
-	struct pm_policy_event evt1, evt2;
-	const struct pm_state_info *next;
-	uint32_t now;
+	struct pm_policy_event evt1;
+	struct pm_policy_event evt2;
+	uint32_t now_cycle;
+	uint32_t evt1_1_cycle;
+	uint32_t evt1_2_cycle;
+	uint32_t evt2_cycle;
 
-	now = k_cyc_to_ticks_ceil32(k_cycle_get_32());
+	now_cycle = k_cycle_get_32();
+	evt1_1_cycle = now_cycle + k_ticks_to_cyc_floor32(100);
+	evt1_2_cycle = now_cycle + k_ticks_to_cyc_floor32(200);
+	evt2_cycle = now_cycle + k_ticks_to_cyc_floor32(2000);
 
-	/* events:
-	 *   - 10ms from now (time < runtime idle latency)
-	 *   - 200ms from now (time > runtime idle, < suspend to ram latencies)
-	 *
-	 * system wakeup:
-	 *   - 2s from now (time > suspend to ram latency)
-	 *
-	 * first event wins, so we must stay active
-	 */
-	pm_policy_event_register(&evt1, k_ms_to_cyc_floor32(10) + k_cycle_get_32());
-	pm_policy_event_register(&evt2, k_ms_to_cyc_floor32(200) + k_cycle_get_32());
-	next = pm_policy_next_state(0U, now + k_sec_to_ticks_floor32(2));
-	zassert_is_null(next);
-
-	/* remove first event so second event now wins, meaning we can now enter
-	 * runtime idle
-	 */
+	zassert_equal(pm_policy_next_event_ticks(), -1);
+	pm_policy_event_register(&evt1, evt1_1_cycle);
+	pm_policy_event_register(&evt2, evt2_cycle);
+	zassert_within(pm_policy_next_event_ticks(), 100, 50);
 	pm_policy_event_unregister(&evt1);
-	next = pm_policy_next_state(0U, now + k_sec_to_ticks_floor32(2));
-	zassert_equal(next->state, PM_STATE_RUNTIME_IDLE);
-
-	/* remove second event, now we can enter deepest state */
+	zassert_within(pm_policy_next_event_ticks(), 2000, 50);
 	pm_policy_event_unregister(&evt2);
-	next = pm_policy_next_state(0U, now + k_sec_to_ticks_floor32(2));
-	zassert_equal(next->state, PM_STATE_SUSPEND_TO_RAM);
-
-	/* events:
-	 *   - 2s from now (time > suspend to ram latency)
-	 *
-	 * system wakeup:
-	 *   - 200ms from now (time > runtime idle, < suspend to ram latencies)
-	 *
-	 * system wakeup wins, so we can go up to runtime idle.
-	 */
-	pm_policy_event_register(&evt1, k_sec_to_cyc_floor32(2) + k_cycle_get_32());
-	next = pm_policy_next_state(0U, now + k_ms_to_ticks_floor32(200));
-	zassert_equal(next->state, PM_STATE_RUNTIME_IDLE);
-
-	/* modify event to occur in 10ms, so it now wins system wakeup and
-	 * requires to stay awake
-	 */
-	pm_policy_event_update(&evt1, k_ms_to_cyc_floor32(10) + k_cycle_get_32());
-	next = pm_policy_next_state(0U, now + k_ms_to_ticks_floor32(200));
-	zassert_is_null(next);
-
+	zassert_equal(pm_policy_next_event_ticks(), -1);
+	pm_policy_event_register(&evt2, evt2_cycle);
+	zassert_within(pm_policy_next_event_ticks(), 2000, 50);
+	pm_policy_event_register(&evt1, evt1_1_cycle);
+	zassert_within(pm_policy_next_event_ticks(), 100, 50);
+	pm_policy_event_update(&evt1, evt1_2_cycle);
+	zassert_within(pm_policy_next_event_ticks(), 200, 50);
 	pm_policy_event_unregister(&evt1);
+	pm_policy_event_unregister(&evt2);
 }
-#else
-ZTEST(policy_api, test_pm_policy_events)
-{
-	ztest_test_skip();
-}
-#endif /* CONFIG_PM_POLICY_CUSTOM */
 
 ZTEST_SUITE(policy_api, NULL, NULL, NULL, NULL, NULL);