Regulator Publishes Annual Funding Statement For DB Schemes

On April 27, 2023, the Regulator published its annual funding statement for DB schemes. This statement is essential reading for trustees of schemes with valuation dates between September 22, 2022, and September 21, 2023 (known as Tranche 18, or T18).

It is also relevant to schemes undergoing significant changes that require a review of their funding and risk strategies. The Regulator recognises that this year schemes may be in a transformed funding position, and its key messages are:

• As most schemes have improved funding levels trustees will need to consider whether their long-term targets remain appropriate, whether buy-out is viable or other end-game options apply.
• If funding levels have improved significantly, trustees should consider whether continuing with the existing investment strategy is in members' best interests. The Regulator urges applying some of the funding gains towards a less risky funding and investment strategy designed for a smoother and