Defined Benefit Funding Code of Practice

The Pensions Regulator (TPR) is consulting on a new Code of Practice for funding Defined Benefit (DB) pension schemes. Alongside the Code, TPR has issued a separate consultation for its proposed regulatory approach.

Under the new legislation, trustees of DB schemes must agree a long-term funding and investment strategy that targets, as a minimum, low dependence on the sponsoring employer by the time the scheme is ‘significantly mature.’

Relevant to all DB pension scheme stakeholders, this briefing analysis covers the following key topics:

•    Details of the ‘Statement of Strategy’ – parts 1 and 2
•    Long-term objectives and low dependency funding
•    Reaching low dependency – timescales
•    Agreeing a journey plan 
•    Open schemes – implications
•    Employer covenant and recovery plans
•    TPR’s new twin track approach to assessing valuations
•    Fast Track tests – further details
•    Timescales and next steps