Institute and Faculty of Actuaries comment on tPR's Funding Code of Practice

“The IFoA welcomes tPR’s emphasis on a proportionate approach to managing risk in the Code of Practice and the encouragement of a collaborative approach between sponsors and trustees.  Many pension schemes are engaged in de-risking strategies that anticipate reducing or eliminating risk over a period.  The focus on identification, evaluation and monitoring of residual scheme risks rather than elimination of all risk, in our view, strikes the right balance.

“We are pleased to see the change of emphasis to “reasonable affordability” in determining shortfall contributions, but anticipate some challenges for sponsors and trustees in reaching agreement on what this means in practice.

“The success of the Code in practice is dependent on the right level of engagement from all stakeholders: trustees, sponsors and tPR.  We note tPR’s statement that it will not focus its resources exclusively on large pension schemes. We support this view as members of all pension schemes are entitled to the same degree of protection, and hope that the approach outlined by tPR does not lead to unintended consequences of regulatory arbitrage.”

ENDS

For further comment please contact Paul Reynolds, Director of Public Affairs by calling 07961957487 or by emailing paul.reynolds@actuaries.org.uk

About the Institute and Faculty of Actuaries

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1. Research undertaken by the IFoA is not commercial. We are a professional body. As a learned society, research helps us to fulfil two of our royal charter requirements; to further actuarial science and serve the public interest.
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