The Pensions Regulator

Code of practice 03
Funding defined benefits

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Introduction

This code of practice

6. The Pensions Regulator is required to issue this code of practice (code).⁵ The Pensions Regulator has also taken the opportunity to provide further guidance.⁶

Aims of this code

7. This code aims to assist trustees to discharge their duties under the new legislative requirements concerning the funding of defined benefits.⁷ These requirements apply to any valuation received by trustees on or after 30 December 2005 which is based on an effective date of 22 September 2005 or later. Transitional arrangements will apply to those schemes that were previously subject to the minimum funding requirement (MFR).⁸
8. This code also assists trustees to discharge their duties under the new legislative provisions concerning those disclosure of information requirements linked to the scheme funding provisions of Part 3.⁹
9. The code also sets out what are regarded as reasonable periods for both passing certain information, and reporting, to the Pensions Regulator.¹⁰

To whom is the code directed?

10. The code is directed at the trustees of all occupational pension schemes providing defined benefits subject to Part 3. It also applies, in certain respects, to actuaries appointed by the trustees.
11. The code may be useful to the trustees' advisers, the trustees as well as to employers and their advisers.
12. Trustees reading this code are expected to have some knowledge and understanding of the funding of defined benefits. For more information on what is expected, please refer to the Pensions Regulator's code of practice on 'Trustee knowledge and understanding'¹¹ and its associated guidance on the scope of the requirements. It also provides guidance to trustees on how to comply with the requirements to have knowledge and understanding of pensions and trust law, the principles of investment and scheme documents.¹²

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