Stakeholder Update Summer 2013 - The Pensions Regulator

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‘Our statement
makes it clear that
legislation requires
the discount rate
to calculate future
liabilities (known
as ‘technical
provisions’), to be
chosen prudently’
Annual DB
funding statement
In May we published our annual funding
statement primarily aimed at helping
pension scheme trustees and sponsoring
employers undertaking valuations with
effective dates between 22 September 2012
and 21 September 2013.
Our statement makes it clear that legislation requires
the discount rate to calculate future liabilities (known as
‘technical provisions’), to be chosen prudently, taking into
account the yield held by assets of the scheme and/or
the yield on Government or high-quality bonds. Trustees
can use the flexibility available in setting discount rates to
adopt an approach to best fit their circumstances.
Trustees are also reminded that they should take into
account what is reasonably affordable to the employer
when agreeing contribution levels and should consider
whether the current level of contributions can be
maintained. For some employers it may be reasonable to
make increases while others may find that they are unable
to do so.
To view the annual DB funding statement, visit our website:
www.tpr.gov.uk/doc-library/statements.aspx#s8142
Trustees are also encouraged to produce plans that
take an integrated approach to managing the risks
to their scheme, including funding levels, investment
performance and the employer covenant.
Finally, we also set out that we continue to evolve
our suite of risk indicators as part of our filter
mechanism for assessing recovery plans and that we
would continue with our programme of proactive
engagement with a selection of schemes undergoing
2013 valuations.
Looking forward
• DC code and response
to the consultation
• DC regulatory approach
• DC compliance and
enforcement strategy
• Employer, IFA and accountant guides
to choosing a quality DC scheme
• Updated management committee guidance
Continuing this busy year, we also expect to issue
consultations on revisions to our defined benefit code
and regulatory approach, record-keeping, public service
pensions and trustee knowledge and understanding.
Stakeholder Update Summer 2013 4