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Statutory financial statements (DB)

Important

Early draft of the code of practice

This code is not in force yet. It is an early version for the new code of practice consultation.

To give us feedback on issues such as the design, usability and navigation of this code, email us at webfeedback@tpr.gov.uk.

You can also read more information about the consultation.

Published: 17 March 2021

Governing bodies of DB pension schemes must, unless they are exempted from doing so,SDB1 provide their members and beneficiaries with a summary funding statement within a reasonable period of finalising any actuarial report or actuarial valuation.SDB2

We expect that, in most cases, a period of three months is reasonable.

Governing bodies of DB pension schemes must also issue benefit statements to members on request.SDB3

When drafting these statements, governing bodies should follow the principles set out in General principles for member communications.

Governing bodies can also find further information on communicating with members in our communicating and reporting guide.

We have set our expectations below. These expectations relate to information about DB benefits in the scheme.

Any scheme providing DC benefits, for example through additional voluntary contributions, should ensure the requirements in Statutory financial statements (DC) are also met.

Summary funding statements

The governing body must include within the statement:SDB4

  • a summary of the extent to which the scheme assets are adequate to cover the technical provisions based on the latest available actuarial valuation
  • an explanation of any changes in the funding position from the previous statement
  • the actuary’s estimate of solvency as set out in the latest valuation
  • a summary of any recovery plan in force
  • a statement explaining the following, including a summary of any applicable circumstances. Whether the scheme:
    • has been modified under section 231(2)(a) of the Pensions Act 2004 (the 2004 Act)
    • is subject to directions under section 231(2)(b) of the 2004 Act
    • is bound by a schedule of contributions by us under section 231(2)(c) of the 2004 Act
  • a statement explaining any surplus payment to the employer, and the amount of that payment

Benefit statements

The governing bodies must:

  • issue a benefit statement to members as soon as possible following a request being made, and within two months
  • include the information required by legislationSDB5

Glossary and legal references

Additional Voluntary Contributions

Known as AVCs, an additional employee contribution paid into the scheme in return for additional benefits

Recovery plan

A payment plan for the scheme employer or employers, put in place to enable a defined benefit scheme to be funded on the minimum statutory basis

SDB1Regulation 15 of the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013
[Regulation 15 of the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations (Northern Ireland) 2014]

SDB2See regulation 15 of, and schedule 4 to, the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013
[See regulation 15 of, and schedule 4 to, the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations (Northern Ireland) 2014]

SDB3 Regulation 16 of the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013
[Regulation 16 of the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations (Northern Ireland) 2014]

SDB4Schedule 4 to the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013
[Schedule 4 to the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations (Northern Ireland) 2014]

SDB5Regulation 16(2) of the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013
[Regulation 16(2) of the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations (Northern Ireland) 2014]