Actuarial funding valuations
Produced in partnership with Alison Fleming of PWC

The following Pensions practice note produced in partnership with Alison Fleming of PWC provides comprehensive and up to date legal information covering:

  • Actuarial funding valuations
  • Statutory requirement for actuarial funding valuations
  • Outline of requirements
  • Timing of actuarial funding valuations
  • Years when no full valuation is required
  • The importance of employer covenant
  • Setting the valuation assumptions
  • Taking account of significant economic changes
  • Power to set the employer contribution rate
  • Recovery plan
    • More...

Actuarial funding valuations

CORONAVIRUS (COVID-19) UPDATE: The coronavirus pandemic has had a detrimental impact on the funding levels and employer covenant of a lot of DB schemes. The Pensions Regulator (TPR) has issued various guidance documents to help DB trustees deal with funding issues, including employer covenant changes, employer requests for funding easements (eg to reduce or suspend deficit repair contributions), completing ongoing valuations and changes to recovery plans. Until 30 June 2020, DB trustees could delay their recovery plan submission/valuations if they needed more time to consider the scheme’s and employer’s situation.

In updated guidance ‘COVID-19: an update on reporting duties and enforcement activity’, ‘DB scheme funding: COVID-19 guidance for employers’, and ‘DB scheme funding and investment: COVID-19 guidance for trustees’ published on 16 June 2020, TPR noted that trustees would be required to resume reporting information with effect from 1 July 2020 including for late valuations and recovery plans not agreed. Otherwise, TPR reiterated that it would continue to take a reasonable approach to late submission caused by COVID-19 issues provided valid reasons can be shown. TPR will support trustees if they cannot agree a valuation for valid reasons.

For further information, see Practice Note: Coronavirus (COVID-19)—the pensions implications for trustees—Funding impact for DB schemes.
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