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

The following Pensions practice 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
  • Statutory funding objective
  • Statement of funding principles
  • Funding and investment strategy
  • Actuarial valuations
  • Certification of technical provisions
  • Recovery plan
  • Schedule of contributions
  • Failure to make payment
  • More...

Pension scheme funding—beginners’ guide

CORONAVIRUS (COVID-19) UPDATE: The coronavirus pandemic has had a detrimental impact on the funding levels of many defined benefit (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: TPR is working on the design of a new code of practice for the funding of DB schemes, which will provide clearer funding standards and implement measures introduced in PSA 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 up-front will be put through a ‘Fast Track’ approach to regulatory sign-off of their funding arrangements. For those who

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