Engaging in scheme funding negotiations
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:

  • Engaging in scheme funding negotiations
  • Purpose of scheme funding negotiations
  • How negotiations take place
  • Conflicts of interest
  • Timescales
  • The Pensions Regulator's approach to scheme funding
  • Key considerations in negotiations
  • Strength of employer covenant
  • Investment strategy
  • Assumptions used to measure the liabilities
  • More...

Engaging in scheme funding negotiations

THIS PRACTICE NOTE APPLIES TO DEFINED BENEFIT OCCUPATIONAL PENSION SCHEMES

CORONAVIRUS (COVID-19) UPDATE: The coronavirus pandemic has had a detrimental impact on the funding levels of a lot of DB schemes and on their employer covenant. The Pensions Regulator (TPR) has issued various guidance documents, including DB scheme funding and investment COVID-19 guidance for trustees and the Annual Funding Statement 2020, 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.

For further information, see Practice Note: Coronavirus (COVID-19)—the pensions implications for trustees — Funding impact for DB schemes.
FORTHCOMING DEVELOPMENT: The Pensions Regulator (TPR) is working on the design of a new code of practice for the funding of defined benefit (DB) schemes, which will provide clearer funding standards and implement measures introduced through the Pension Schemes Act 2021, including the requirement for a long-term funding strategy.

On 3 March 2020, TPR published its first consultation on the revised DB code of practice, which focuses on the principles behind the new code. TPR proposes a ‘twin-track’ compliance approach to how it oversees the funding arrangements of DB pension funds. Schemes that can provide required information on investments and risks
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