TPR’s new DB funding code
Fast track or bespoke: A guide for employers
03 Dec 2020
The Pensions Regulator (TPR) is consulting on a new, more prescriptive DB code of practice which introduces “fast track” and “bespoke” approaches to funding DB schemes.
Having a clearly articulated “fast track” route through the valuation process provides some clarity, but potentially comes at a much higher cost. For most schemes, passing the “fast track” hurdles will mean increased deficit contributions.
For employers, there is a risk that pension scheme trustees will default to the “fast track” option. The “fast track” funding target is expected to be 10-15% more prudent than a typical funding basis, and 15-20% more prudent that an IAS19 / FRS102 basis. It's also likely to accelerate and increase deficit contributions. The employer will be expected to pay deficit contributions, if necessary, right up to full funding on a “low dependency” basis (and will remain liable for any additional contributions should these be needed).
Read our full guide for more details on:
- What this means for employers
- How employers can reduce cash costs by providing additional security to the scheme
- Non-cash funding solutions
- How we can help