NEWS   |    February 28, 2020

Partner Rosalind Connor comments in the Financial Times on TPR’s proposal to make significant changes to funding rules

The Pensions Regulator is expected next week to unveil significant changes to the funding code governing the UK’s 6,000 defined benefit pension schemes, with a much tougher line expected on how quickly deficits are cleared.

A spokesperson for the Pensions Regulator said: “We are mindful of potential impacts on employers and will, after we receive feedback from this consultation exercise, carry out an impact assessment to make sure that member security and impacts on employers are appropriately balanced.”

Currently, employers and their pension scheme trustees agree a funding approach during three-yearly valuation discussions with the regulator, increasingly challenging the proposed plans.

But the new funding approach is expected to see the regulator pay much closer attention to funding plans that look to reduce scheme liabilities by adopting rosier outlooks on investment returns, or by relying on higher-risk assets to underpin the payment of pension promises.

Rosalind Connor commented:

“The political climate now is that the regulator will be lambasted if a company goes bust and the pension scheme is not well funded.”

“The regulator is likely to push schemes and employers towards a more standardised funding approach to protect members’ benefits.”

Read Rosalind’s comments in the Financial Times.

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