Defined Benefit Funding Code of Practice

The Pensions Regulator (TPR) has published a new Code of Practice for funding Defined Benefit (DB) pension schemes. Alongside the Code, TPR has confirmed the details of its new regulatory approach.

Under the new legislation, trustees of DB schemes must agree a long-term funding and investment strategy that targets, as a minimum, low dependence on the sponsoring employer by the time the scheme is ‘significantly mature.’

Relevant to all DB pension scheme stakeholders, this briefing analysis covers the following key topics:

•    Details of the ‘Statement of Strategy’ – parts 1 and 2
•    Long-term objectives and low dependency funding
•    Reaching low dependency – timescales
•    Agreeing a journey plan 
•    Open schemes – implications
•    Employer covenant and recovery plans
•    TPR’s new twin track approach to assessing valuations
•    Fast Track tests – further details
•    Timescales and next steps