The Pensions Regulator’s (TPR) new funding code for defined benefit (DB) schemes, which provides guidance and sets expectations for meeting funding and investment strategy (FIS) requirements, takes effect today.
This code applies to DB schemes with actuarial valuations from 22 September 2024 onward.
Neil Bull, TPR's Executive Director of Market Oversight, emphasised that the code aims to align trustees with appropriate long-term objectives for their schemes, ensuring clarity and enhanced regulatory oversight to secure members' benefits. Minister for Pensions, Emma Reynolds, highlighted the significance of DB pensions for the retirement of millions, noting the code's role in setting higher standards while maintaining flexibility to protect members' entitlements.
The related DB regulations were introduced in April 2024 and similarly apply to valuations from late September. TPR plans to provide further support for implementing the code, including a webinar in December and additional covenant guidance later this year.
Additionally, TPR is developing a digital service to streamline the submission of funding and strategy documents, set to be available in spring 2025, with pilot testing already underway. Key elements of the code encourage sound long-term planning, risk management and guidance on funding and recovery plans based on sponsor capacity.
TPR’s core objectives include protecting members’ benefits, reducing reliance on the Pension Protection Fund, promoting strong pension administration, enforcing compliance and supporting employers' sustainable growth.