This webinar will highlight the key issues and alert you to the implications for funding of your HEI’s DB pension scheme, and whilst TPR will not be in a position to comment directly about USS or SAUL, these new rules will be applying to multi-employer schemes too.
Participation in this HE sector-focussed webinar will provide the information needed to consider the proposed DWP changes in the context of an HEI’s pensions obligations and to respond on behalf of an HEI to the consultation accordingly.
Background
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These regulations will potentially have a significant impact on how DB schemes manage funding. Under the Pension Schemes Act 2021 DB schemes are required to have a F&I strategy aimed at achieving “low dependency” on their sponsoring employer by the time they are “significantly mature”. This will require schemes to gradually de-risk in accordance with timescales set by the Pensions Regulator.
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The concept of having a strategy which sets out the funding level that the trustees “intend the scheme to have achieved” and the investments they intend to hold will be included in regulations for the first time. Technical provisions will need to be calculated in a way that is consistent with the F&I strategy.
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For open DB schemes, this means that regulations will not prevent access to “riskier investments where there are potentially higher returns, as long as the risks being taken can be supported and members’ benefits are effectively protected”. This appears to be much less flexible than the current approach. For a closed scheme, as the prudence in the financial and demographic/options assumptions unwinds, surpluses will arise – funds that might better be used for your charitable objectives.
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There will also be a definition of employer covenant strength, including the requirement that deficits ‘must be recovered as soon as the employer can reasonably afford’. This may well result in certain schemes needing to bring forward and increase employer contributions. The impact for some may be marked – employers with weak covenants may find de-risking difficult and those which are strong could find they need to provide additional funding to remove the deficit sooner.
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Trustees will be required to produce their first F&I Strategy no later than 15 months after the effective date of the first actuarial valuation after the Regulations come into force.
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The DWP’s consultation closes on 17 October 2022 with a second consultation from TPR on the revised funding code of practice (“the Code”), expected after. While no date has been specified, the Regulations indicate that they will come into effect at some point in 2023.
Speakers
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Chair: Emelda Nicholroy, Head of Pensions Policy, UCEA
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David Fairs, Executive Director Regulatory Policy Analysis and Advice, The Pensions Regulator
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Sophie Ash, Director and Actuary
Who may wish to attend?
This event is directly relevant for those involved with the management of trust-based schemes that are regulated by TPR, from an operational or governance perspective and will be of particular interest to those HEIs with a DB SAT and who participated in USS and SAUL. This includes Finance Directors, Human Resource Directors, Pension Managers, Trustees, and Council members.Attendance fee and how to book
The participation fee is £60 per place for the webinar.Book a place(s) via tickettailor
When booking a place, you have the option of paying online by credit card (note our online booking system indicates the ticket as £60). You can of course be invoiced for the £60 attendance fee (note our online booking system indicates the invoice ticket as £0, you will be invoiced for £60).If you have any queries regarding your interest in attending, please contact events@ucea.ac.uk
