DWP consults on new funding and investment regulations

27 July 2022

The Pension Schemes Act 2021 introduced new requirements for DB schemes to:

  • develop a funding and investment strategy that ensures that benefits can be paid over the long term; and
  • report their progress against this strategy to the Pensions Regulator (TPR).

On 26 July 2022, the Department of Work and Pensions commenced a consultation on new draft regulations implementing these requirements (the DWP Consultation and the Draft Regulations).

The Draft Regulations are light on detail, but they do offer comfort to employers and trustees of open, well-managed DB schemes that they will not be forced into inappropriate de-risking, unnecessary additional costs, or ultimately wind-up.

The DWP Consultation will inform TPR's own consultation on a new revised DB funding code of practice, which is expected to flesh out the new obligations on employers and trustees in more detail and which is expected later in the summer.

The DWP Consultation will run for 12 weeks, closing on 17 October 2022.

Our intention is to have better – and clearer – funding standards, whilst retaining the strengths of a flexible, scheme-specific approach. It is neither ‘one size fits all’, nor about micro-managing schemes. Every scheme will be treated on its merits.