The Pensions Regulator’s (TPR's) new defined benefit (DB) funding code setting out guidance and expectations on how schemes should comply with the funding and investment strategy (FIS) requirements comes into force today.
Trustees of DB pension schemes with actuarial valuation dates on or after 22 September 2024 should use the new code.
TPR’s Executive Director of Market Oversight, Neil Bull said: “I’m delighted that the new DB funding code has come into force. Together with the regulations, it focuses trustees’ minds on the right long-term objective for their scheme and provides clarity of our expectations. It will improve our regulatory grip and should ensure savers get the benefits they expect.”
Minister for Pensions, Emma Reynolds, said “Defined benefit pensions are a critical part of retirement provision for many. With around nine million people relying on them for their retirement income, it is essential that DB pension schemes are safe for members now and sustainable in the longer-term.
“With thanks to our industry partners for their support, today’s funding code allows for a stronger set of standards alongside providing that continued flexibility to make sure scheme members get the pension benefits they’ve worked so hard for.”
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.
Looking forward
TPR is inviting scheme staff and trustees to attend a webinar on Tuesday 3 December to learn more about implementing the new DB funding code. Later this year TPR will issue covenant guidance.
Notes for editors
- 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.
- The new DB funding code was laid in parliament on 29 July 2024.
- 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.
- 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 ('the Regulations').
- 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
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