The Pensions Regulator (TPR) has today published an interim response to its first defined benefit (DB) funding code consultation.
The consultation aimed to scope out what the revised DB funding code may look like under the new developing legislation. It asked for views on several proposals including:
- TPR’s proposed regulatory approach (twin track routes to demonstrating compliance: Fast Track and Bespoke)
- the principles that should underpin all valuations in the revised framework
- ideas on how these principles could be applied in practice to provide clearer guidelines
Today’s interim response highlights how there were 127 responses to the consultation across a broad range of stakeholders, generating 6,000 comments in total. Overall, there was general support for the principles and regulatory approach proposed in the consultation. However, some concerns were raised on how the principles would be applied in practice through the proposed twin-track regime (Fast Track and Bespoke).
David Fairs, Executive Director of Policy at TPR, said: “Our first consultation was complex, and we are grateful for the well thought-out responses. We are now working through the issues raised from more than 6,000 comments received. We will be developing our Fast Track guidelines while taking into account the very challenging current economic conditions, and we will carefully assess any potential impacts.
“Our revised code of practice has to be consistent with new legislation, so we will have to wait for the passage of the Pension Schemes Bill through Parliament and DWP’s consultation on draft regulations, currently expected to be in the first part of this year. We therefore anticipate publishing our second consultation in the second half of 2021.”
TPR’s second funding code consultation in the second half of 2021 will include:
- a full summary of the responses to our first consultation and the approach we have taken in light of these responses and the final legislative package
- the draft code of practice for consultation and our proposed regulatory approach, including developing thinking around:
- our process to review and update Fast Track guidelines
- our approach to assessing valuations
- engagement with DB schemes
- enforcement
- an impact assessment and supporting analysis
Notes for editors
1. The Pensions Regulator is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
