The Regulator has issued its annual scheme funding statement.
It is aimed mainly at trustees and employers of DB schemes undertaking valuations with effective dates between September 2012 and September 2013.
The Regulator's statement can be found here.
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Regulator's funding statement – key points Investment returns and discount rates – trustees can use different assumptions for the technical provisions and recovery plan. Recovery plans – trustees should take into account what the employer can reasonably afford. Where the employer is prioritising investment in its business over contributions, then the trustees need to consider how this benefits the covenant and their status as unsecured creditors. Trustees should use an integrated approach to covenant, investment and funding risk. Triggers – the Regulator is moving away from setting triggers focussed on individual items such as the technical provisions and will be "evolving our suite of risk indicators". |
In the Autumn, the Regulator will be consulting on its regulatory approach to scheme funding – this is connected with the introduction of the Regulator's new statutory objective to support scheme funding arrangements which is included in the Pensions Bill.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
