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From today trustees should use TPR’s new DB Funding Code

Ref: PN24-31

Issued: Monday 23 September 2024

Trustees of defined benefit (DB) pension schemes whose actuarial valuation dates are effective on or after 22 September 2024 should now refer to The Pensions Regulator’s (TPR’s) new DB funding code.

This new DB funding code sets out TPR’s guidance and expectations on how to comply with the funding and investment strategy (FIS) requirements.

The new DB funding code was laid in Parliament on 29 July 2024 and is expected to come into force in late November.

To comply with the new requirements, schemes must submit a statement of strategy. The new DB funding code and FIS requirements will help schemes focus on their long-term objectives. TPR has today published supporting documents to assist trustees with meeting their obligations.

TPR’s Executive Director of Market Oversight, Neil Bull said: “This is a milestone moment for DB trustees, as after years of development, schemes with relevant valuation dates should now be referring to the new funding code, with the rest to follow on in the next two years.

“We have engaged extensively with industry in the development on our new DB funding code. Our expectations are now clear, and I hope trustees find the funding code guidance helpful as they navigate their way through either their first Fast Track or Bespoke valuation.

“We’ve listened to feedback and reduced the data ask of schemes in certain situations such as for well-funded and small schemes. Now, ahead of the launch of a new digital submission platform in the spring, we’re giving schemes information to help them prepare in advance.”

The DB regulations, which align with the DB funding code, came into force in April this year and apply to valuations with effective dates on or after 22 September 2024.

Statement of strategy templates

Legislation requires trustees and scheme managers to submit their statement of strategy to TPR 'as soon as reasonably practicable' after preparing their funding and investment strategy. However, TPR will not expect valuation information, including the statement of strategy, to be submitted until its new digital platform for receiving valuations and related materials is up and running in the spring.

For trustees and scheme managers to understand its expectations in relation to the new requirements for a funding and investment strategy and statement of strategy, TPR has published statement of strategy illustrative templates and a list of the data and information for insertion into the relevant illustrative template.

TPR has also published a summary of the key themes arising from the responses received to its consultation on the statement of strategy, and the key changes made to the proposed templates because of this feedback.

Notes for editors

  • TPR recognises there will be a gap of approximately nine weeks between when the requirements of the Funding and Investment Strategy Regulations start applying and the new DB funding code is in force. Schemes with effective valuation dates in this period should use the new DB funding code as the base for their approach. TPR will be writing to the 118 affected schemes this week.
  • The new DB funding code reflects a changing pensions landscape. To reflect this, TPR is planning to launch its first scheme-facing digital service to enable easy submission of the statement of strategy and other valuation documents. To ensure this service is right for all users, TPR is working with several trustees in user research and to pilot the new system. It will release the live service to all schemes in spring 2025.
  • If schemes wish to submit a valuation before the launch of this service they can contact TPR for support.
  • The new DB funding code:
    • encourages good long-term planning and risk management behaviours
    • includes guidance on how trustees can set funding plans in line with the support their sponsors can provide and how maturing schemes can move to a point of low dependency on their sponsor
    • gives guidance on setting recovery plans in line with what is reasonably affordable for their sponsor
  • TPR will not regard trustees or scheme managers as being in breach of the regulations if a delay in the launch of its digital system next year results in there being a gap between preparation of the funding and investment strategy and submission of the statement of strategy.
  • Papers presented to Parliament by external bodies are presented formally and described as being laid upon the Table of the House. Papers may be laid because the bodies are required to do so by law or by a decision of Parliament, or because the government has decided, or previously committed, to provide information to Parliament. A draft code of practice must be laid for a period of 40 days commencing on the date of laying and ignoring any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days. This is the current status of the new DB funding code.
  • The funding and investment strategy refers to the funding of defined benefit schemes requirements of the Pension Schemes Act 2021, the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024.

TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are to:

  • protect members’ benefits
  • reduce the risk of calls on the Pension Protection Fund
  • promote, and to improve understanding of, the good administration of work-based pension schemes
  • maximise employer compliance with automatic enrolment duties
  • minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only) 

Press contacts

David Morley

Media Officer (DB)
pressoffice@tpr.gov.uk
01273 662091

Matt Adams

Senior Media and Parliamentary Manager
pressoffice@tpr.gov.uk
01273 662086

Out of hours

This is for journalists only with a media enquiry. The below number will divert to our on call media officer.
pressoffice@tpr.gov.uk
01273 648496

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