Defined Benefit Scheme Funding: New Code Of Practice Issued By The Pensions Regulator

The Pensions Regulator has issued its new Code of Practice on Funding Defined Benefits, which replaces the existing Code published in 2005 shortly after the Pensions Act 2004 came into force. In addition to the Code itself, the Regulator has issued an Essential Guide and its Regulatory and Enforcement Policy for defined benefit funding. The Essential Guide is a short document providing an overview of the Code; but the Regulator has stressed that it is not a substitute for reading the entire Code – and that they expect all trustees to do so....

Some key points from the New Code

Trustees and sponsoring employers of defined benefit schemes should note the following:

• The Code encourages trustees and employers to work collaboratively and that trustees should adopt a holistic approach to assessing the funding, employer covenant and investment risks that they face