Revised DB funding and investment regulations

Commenting on the revised DB funding and investment regulations published today, Laura McLaren, Head of DB Actuarial Consulting, Hymans Robertson, said:

“The regulations have some welcome changes while keeping the same framework. The updates have addressed some of the biggest concerns, including inconsistencies with the draft code of practice. Changes to reflect the government agenda to encourage scheme investment in productive finance, means fears that some schemes would be hemmed in, or herded towards very narrow low-risk investment strategies, have been reduced. A fixed basis for maturity will help schemes map out their funding and investment strategy with a clear target date that won’t jump around with market conditions.

“But we won’t know what it will all mean until TPR publishes its new funding code. For example, there isn’t anything in this draft legislation confirming the specific Fast Track parameters or pinning down significant maturity. So today’s update is but one piece of the puzzle schemes will need to consider on regulatory compliance as their end-game plans develop. Nevertheless, 2024 is starting to look like it might be the year when the DB funding regime is finally fully realised.”