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