Statutory requirement for actuarial funding valuations

The trustees of private sector defined benefit (DB) occupational pension schemes registered with HMRC are required by statute to complete actuarial funding valuations at least once every three years.

The requirements apply to a scheme providing defined contribution benefits if these are underpinned by a DB promise.

Additionally, the statutory requirement for actuarial funding valuations is also commonly found in schemes’ trust deed and rules.

Outline of requirements

Broadly, DB trustees are required:

1. •

   to provide a statement of funding principles setting out the funding objective for the scheme (known as the statutory funding objective)

2. •

   to undertake periodic actuarial valuations comparing the scheme’s assets and liabilities (the technical provisions)

3. •

   for scheme valuations with an effective date on or after 22 September 2024, to provide a funding and investment strategy setting out the scheme’s journey plan to reach a minimum of low dependency on the employer by the time the scheme is significantly mature

4. •

   to provide a schedule of contributions