Funding defined benefit pension schemes - Implementing the new arrangements - Consultation package
22 March 2005
This consultation seeks views on a package of proposals introducing the detailed arrangements for the new scheme funding requirements which, following the Pensions Act 2004, will replace the minimum funding requirement.The code of practice covering scheme funding, issued by the Pensions Regulator, supplements the legislative requirements. The Department for Work and Pensions and the Pensions Regulator are therefore conducting a joint consultation to invite views on the package as a whole. The package consists of:
- draft Occupational Pension Schemes (Scheme
Funding) Regulations 2005 (267KB)
.
The draft regulations set out the details of the new scheme funding requirements,
including the preparation of statements of funding principles, actuarial
valuations and reports, schedules of contributions and recovery plans; - a
draft Code of Practice – Funding Defined Benefits (422KB)
issued by the Pensions Regulator. The draft code provides practical guidance
for trustees on carrying out their duties in the area of scheme funding;
- draft Occupational Pensions (Disclosure
of Information) Amendment Regulations 2005 (99KB) .
The draft regulations set out the requirements for the new annual funding
statement for scheme members, and the disclosure of other documents related
to scheme funding;
- a summary of proposals for transitional
arrangements (134KB)
facilitating the transfer of schemes from the MFR to the new scheme funding
requirements; and
- a summary of proposals for the main consequential
amendments (95KB)
arising from the introduction of the new scheme funding requirements.
The last two of these items will form an Order which has yet to be drafted.
The final version of the code has complementary guidance from the Pensions Regulator. This link will take you to the Pensions Regulator website] containing, for instance, sample documents. This guidance is not yet fully developed, but the latest draft is included for information as part of this package to give the complete picture.
We have taken the decision to consult on the package at this stage rather than wait for all the component parts to be complete because we recognise that there is much interest in seeing the detailed requirements and guidance as soon as possible. Although there is no statutory requirement to consult on the Scheme Funding Regulations, the transitional arrangements and the consequential changes because they arise from recent legislation, consultation on such technically complex areas is always mutually beneficial. And consultation on the code of practice (where there is a statutory duty to consult) is most meaningful in the context of looking at the draft regulations.
It is expected that the new scheme funding legislation and the code will apply to schemes from 23 September 2005, in line with the timetable for implementing the European Directive on the activities and supervision of institutions for occupational retirement provision.
How to respond
We would welcome your views on this package of proposals. The consultation period begins on March 2005 and ends on 6 May 2005. Please ensure your responses reach us by this date.
We would prefer to receive e-mail responses, but you can write to us or fax your comments if you prefer.
Please send your responses:
by e-mail to: fundingcode@thepensionsregulator.gov.uk
by post to: Jane Burke, Secretariat, Invicta House, Trafalgar Place, Brighton BN1 4DW
or
by fax to: Jane Burke, Secretariat: 01273 627241
If you need any clarification about the issues raised in this consultation, please call Jane Burke on 01273 811834.
If you would like a hard copy, please let us know.
Please state whether you are representing the views of an organisation, or are responding as an individual. If you are responding on behalf of a larger organisation please make it clear who the organisation represents and, where applicable, how the views of members were assembled.
The information you send us may need to be passed to colleagues within the Department for Work and Pensions and the office of the Pensions Regulator. It may also be published in a summary of responses to this consultation, along with a response from the Department for Work and Pensions and the Pensions Regulator.
According to the requirements of the Freedom of Information Act (2000), all information contained in the response, including personal information, may be subject to publication or disclosure. Where respondents request that information given in response to the consultation be kept confidential, this will only be possible if it is consistent with Freedom of Information obligations.
A summary of responses, and the conclusions reached by the Department for Work and Pensions and the Pensions Regulator in the light of them, will be published in the Autumn, and will be available at www.dwp.gov.uk and www.thepensionsregulator.co.uk
DWP values feedback on how well it consults. If you have any comments on the process of this consultation (as opposed to the issues raised) please contact the DWP Consultation Co-ordinator. In particular, please tell us if you feel that the consultation does not satisfy these criteria. Please also make any suggestions as to how the process of consultation could be improved further. Please contact:
Geoff Ashton
DWP Consultation Co-ordinator
5th Floor East, Trevelyan Square
Leeds
LS1 6EB
Tel: 0113 23 27 107
Geoff.Ashton@dwp.gsi.gov.uk
Because of the technical nature of this package, Ministers have decided that it is not appropriate to publish it under the provisions of the Cabinet Office Code of Practice on consultation. It does, however, apply best practice from the Code. After discussions with interested parties in the pensions industry, and taking account of the implementation timetable, we have decided that a consultation period of 6 weeks is appropriate in this case.
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