Draft defined benefit (DB) funding code of practice and regulatory approach consultation

Published: 16 December 2022

Closing date: 24 March 2023

Consultation on our draft defined benefit (DB) funding code of practice and our regulatory approach to assessing valuations.

Summary

In this 14-week consultation, we are seeking views on a draft DB funding code of practice, which provides practical guidance on how trustees can comply with scheme funding requirements. We are also consulting on Fast Track and our regulatory approach.

Introduction

This is our second of two consultations on the draft DB funding code.

Published in March 2020, our first consultation set out our proposals for a clearer, more enforceable funding framework. We welcomed comments on:

our proposed regulatory approach
the key principles that should underpin all valuations
options for how these principles could be applied in practice through more detailed guidelines

Our approach to the consultation

We are now seeking views on the draft DB funding code of practice itself and our regulatory approach to assessing valuations.

We have developed our approach to reflect the direction of legislation (as consulted on by the Department for Work and Pensions from July to October 2022), responses to our first consultation and our additional analysis.

This consultation package includes the following:

The draft DB Funding Code of Practice – setting out our expectations of how trustees can comply with scheme requirements.
The DB Funding Code consultation document – explaining our approach, including relevant considerations and obligations.
Fast Track and our regulatory approach consultation document – explaining our twin track regulatory approach to assessing valuations and the proposed design of Fast Track.
The response to our first consultation.

In our introduction to the draft code, we give an overview of the draft funding requirements and explain how we have structured the draft code to reflect this.

How to respond

Complete our online survey.

Email to: db.consultation@tpr.gov.uk

Post to:

DB Funding Code Team
Regulatory Policy Advice and Analysis Directorate
The Pensions Regulator
Napier House
Trafalgar Place
Brighton BN1 4DW

Timetable

This consultation will be longer than usual and be open for 14 weeks to ensure there is sufficient time for industry to engage with our proposals.

The draft code is based on the draft regulations the DWP consulted on in 2022. It is not our usual process to consult on a draft code before the regulations have been finalised and we are aware there may be changes to the DWP’s regulations that will need to be reflected in the final code.

We think it is important to consult on the draft code now as this gives industry the opportunity to see how we have interpreted the draft regulations and how the different elements of the DB funding code package will integrate and work together before the regulations and draft code are finalised.

We will continue to engage closely with the DWP and industry throughout 2023.