PLSA comments on the publication of TPR’s new DB Funding Code consultation document
16 December 2022
The Pensions and Lifetime Savings Association (PLSA) has commented on the publication of The Pensions Regulator’s (TPR) Defined Benefit (DB) Funding Code consultation document.
Tiffany Tsang, Head of DB, LGPS and Investment, PLSA, said: “We are pleased that the draft allows for the flexibility the PLSA called for in determining technical provisions for schemes open to new entrants. Overall, we support TPR’s move away from using Fast Track as a benchmark and that TPR has signalled clearly that many Bespoke valuation submissions will not result in detailed scrutiny or engagement. We note that recovery plans based on affordability will be a core focus for the regulator if schemes fall within Fast Track in all other ways.
“While we support ongoing dialogue between trustees and employers in developing funding and investment strategy, we remain concerned that the draft code shifts the fundamental ways in which strategy negotiations currently operate. The proposals may give disproportionate weight to employers’ preferences, which may not be aligned with trustees’ objectives, particularly in the current economic climate. We agree that the use of LDI should be wrapped into considerations of supportable risks that would naturally be laid out in journey plans; the drafted expectations around when and how to use LDI are reasonable.
“However, further assessment of the proposals is needed before drawing firm conclusions so we will work closely with our membership and TPR in the coming months to determine the on-the-ground impact of the detail that is now provided - on open schemes, for Bespoke approaches, and for multi-employer schemes in particular. The Code will also need to completely fill in the gaps that the draft scheme funding regulations left open for interpretation.”
Mark Smith, Head of Media Relations
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Steven Kennedy, Senior PR Manager
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