The Department for Work and Pensions has responded to concerns from businesses about the new Defined Benefit funding regime, but it will still be overly restrictive.
A handful of high-profile failures in the early 2010s prompted calls for reform of the Defined Benefit (DB) funding regime to ensure schemes were being managed effectively. Six years on from the government’s Protecting Defined Benefit Schemes White Paper in 2018, the Department for Work and Pensions (DWP) has now finalised its intentions for the new regime and will be laying regulations in April – with schemes with valuation dates from September 2024 then in scope of the new regime.
Despite the DWP’s 2018 White Paper concluding that there was ‘no systemic problem in the existing regulatory and legislative framework’, the new regulations will still act as a barrier across the DB pensions sector. Most importantly, they reduce the ability of the Pensions Regulator (TPR) to take a truly scheme-specific approach to funding that appreciates the unique circumstances of schemes.
This in turn will impact how most schemes – and not just those fe
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