The scheme-specific funding regime
Produced in partnership with Elizabeth Graham of Squire Patton Boggs
The scheme-specific funding regime

The following Pensions guidance note Produced in partnership with Elizabeth Graham of Squire Patton Boggs provides comprehensive and up to date legal information covering:

  • The scheme-specific funding regime
  • The statutory framework
  • Statutory funding objective
  • Statement of funding principles
  • Actuarial valuations and reports
  • Certification of technical provisions
  • Recovery plan
  • Schedule of contributions
  • Agreeing the schedule of contributions—implications for trustees
  • Statutory funding regime versus scheme rules
  • more

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. After a first failed attempt to legislate on these measures (through the Pension Schemes Bill 2019), the Pension Schemes Bill 2020 was reintroduced in Parliament on 7 January 2020. This 2020 Bill (which differs from its 2019 predecessor only in minor ways) will require DB trustees to have a ‘funding and investment strategy’ for the purpose of ensuring scheme benefits can be paid over the long term. That strategy is to be set out in a ‘statement of