Statutory funding regime and the interaction with scheme rules
Produced in partnership with Squire Patton Boggs and Elizabeth Graham of Walker Morris LLP

The following Pensions practice note produced in partnership with Squire Patton Boggs and Elizabeth Graham of Walker Morris LLP provides comprehensive and up to date legal information covering:

  • Statutory funding regime and the interaction with scheme rules
  • The Pensions Act 2004 funding regime
  • Interaction with scheme rules
  • Problem areas with scheme rule interaction
  • The British Vita case
  • The Allied Domecq case
  • The Pilots case
  • Has case law reduced the uncertainty?

Statutory funding regime and the interaction with scheme rules

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 in 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 up-front will be put through a
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