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Summary funding and pension benefit statements (DB)

Code in force: 28 March 2024

Summary funding statements

  1. Governing bodies of defined benefit (DB) pension schemes must, unless they are exempt from doing so1, provide their members and beneficiaries with summary funding statements within a reasonable period from the date by when the governing body must receive each actuarial valuation or actuarial report2. In most cases, a period of three months will be reasonable.
  2. Governing bodies of DB pension schemes must also issue benefit statements to members on request3.
  3. When drafting these statements, governing bodies should follow the principles set out in General principles for member communications.
  4. The requirements set out in this module relate to information about DB benefits in the scheme. The governing body of any scheme providing defined contribution (DC) benefits, for example through additional voluntary contributions, must also meet the requirements in the Annual pension benefit statements (DC).

Summary funding statements

  1. The governing body must include within any summary funding statement4:
    1. a summary as to whether the scheme assets are enough to cover the technical provisions based on the latest available actuarial valuation and any actuarial report since that valuation
    2. an explanation of any changes in the funding position from the previous statement
    3. the actuary’s solvency estimate as set out in the latest actuarial valuation
    4. a summary of any recovery plan in force
    5. 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
    6. a statement explaining whether any surplus payment has been made to the employer, and the payment amount
    7. the website address for any published report on climate change5 and information as to how a hardcopy of the report can be requested’

Benefit statements

  1. The governing body must:
    1. issue a benefit statement to members as soon as possible following a request for one, and within two months
    2. include the information required by legislation5, which is summarised in c to f below.
    3. for active members the required information includes:
      • the amount of benefit payable, if the member of the scheme was to die in service on a specified date, including how the benefit is calculated
      • the amount of member’s and survivors’ benefits, not accounting for potential increase to the member’s salary, that would be payable from the payment date, if pensionable service were to end on one of (option chosen by the governing body):
        • the date the member will attain normal pension age
        • a date that has been specified by the governing body, or
        • a date agreed with the member
      • the member’s earnings that are used to determine the benefits in the scheme, as at a date specified by the governing body.
    4. For active and deferred members the required information includes:
      • The date pensionable service began
      • An overview of how the member’s and any survivors’ benefits are calculated
      • Whether any deductions apply and how these are calculated
      • Where the governing body is required to publish a report in relation to climate change6 on a website, information about how to access that document online, including the address for the website and also how to request a hard copy of the report if available.
    5. For deferred members the required information includes:
      • The date the member’s pensionable service ended.
      • The amount of the member’s and survivors’ benefits and the date these are payable.
      • The member’s earning figure, used to determine benefits in the scheme, on the date service ended.
    6. For pension credit members the required information includes:
      • The value of the member’s and survivors’ benefits from the date benefits are payable.
      • An overview of how the member’s and any survivors’ benefits are calculated.
      • Whether any deductions apply and how these are calculated.

Glossary and legal references

Actuarial report

A written report, prepared and signed by the actuary, on developments affecting the scheme’s technical provisions since the last actuarial valuation was prepared, as required by section 224 of the Pensions Act 2004.

Actuarial valuation

A written report, prepared and signed by the actuary, valuing the scheme’s assets and calculating its technical provisions, as required by section 224 of the 2004 Act.

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 meet the statutory funding objective.

1Regulation 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]

2See 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]

3Regulation 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]

4Schedule 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]

5Regulation 6 of the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 [Regulation 6 of the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations (Northern Ireland) 2021]

5Regulation 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]

6Regulation 6(1)(b) of the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 (climate change reporting and publication requirements)