The Pensions Regulator has published a consultation on the regulation of the statutory defined benefit funding regime. The consultation proposes a “fast track” approach that would enable trustees to submit valuations with the expectation of minimal regulatory scrutiny, provided their approach to funding and investment meets all of the regulator’s “compliance guidelines.” The consultation closes on 2 Jun 2020.
Alternatively, trustees and employers can use a customized approach if they want more flexibility. If using a customized approach, they would have to justify their decisions and should expect more regulatory scrutiny. Trustees also would have to demonstrate that the additional risk taken — relative to the fast track approach — is manageable.
It’s unlikely the new regime will be formally implemented before late 2021, but the regulator is already attempting to implement many of the approaches discussed in the consultation.