Pension scheme funding—beginners’ guide
Produced in partnership with Wyn Derbyshire of gunnercooke LLP
Pension scheme funding—beginners’ guide

The following Pensions guidance note Produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:

  • Pension scheme funding—beginners’ guide
  • The statutory scheme-specific funding regime
  • Monitoring the employer covenant
  • Disclosure of funding information to members
  • Managing scheme funding deficits

FORTHCOMING DEVELOPMENT 1: The March 2018 White Paper ‘Protecting Defined Benefit Pension Schemes—A Stronger Pensions Regulator’ identified concerns about a lack of accountability and clarity on what a good DB funding strategy is, thereby resulting in poor scheme funding and investment decision-making sometimes focused on the short term. The government therefore expressed the intention to legislate so as to require DB trustee boards to appoint a chair and for that chair to report on key scheme funding decisions to the Pensions Regulator (TPR), including how the funding standards are met and how the scheme funding objective is set in line with a long term funding objective. Reflecting this, the annual funding statement published by TPR in March 2019 also set out TPR’s expectation that trustees and employers of DB schemes should agree a long-term funding target. Following the Queen’s Speech of 14 October 2019, the government unveiled a Pension Schemes Bill on 16 October 2019 which, among other things, requires DB trustees to agree with the employer a ‘funding and investment strategy’ for the purpose of ensuring scheme benefits can be paid over the long term. That strategy should be set out in a ‘statement of strategy’ which also covers other matters, including the trustees’ assessment of whether the funding and investment strategy is