Is your scheme ready for the new funding code of practice?
Is your scheme ready for the new funding code of practice?
22 Oct 2024
The Pensions Regulator’s new funding code will mean a collaborative approach between employers and trustees will be needed. Employers should therefore look to proactively engage with trustees ahead of the next funding valuation to ensure appropriate decisions and long-term targets are made.
At a glance
- New requirements apply to all funding valuations with an effective date on or after 22 September 2024
- For the first time, employers will be required to develop a formal funding and investment strategy
- Opportunities exist for employers to take the lead to align long-term strategies with their broader corporate objectives
- Covenant is more important than ever, with an assessment now a legal requirement and new concepts introduced
- For schemes with increasing liabilities, TPR has previously estimated total contributions could increase by c.£7bn
- For these schemes, there are significant risks of bad outcomes for employers who do not engage with trustees
This edition of XPS Express is the first in a series on setting long-term strategies. Read part two and part three.