Cost control

I113Employer contributions in funded schemes

1

This section applies in relation to a scheme under section 1 which is a defined benefits scheme with a pension fund.

2

Scheme regulations must provide for the rate of employer contributions to be set at an appropriate level to ensure—

a

the solvency of the pension fund, and

b

the long-term cost-efficiency of the scheme, so far as relating to the pension fund.

3

For that purpose, scheme regulations must require actuarial valuations of the pension fund.

4

Where an actuarial valuation under subsection (3) has taken place, a person appointed by the responsible authority is to report on whether the following aims are achieved—

a

the valuation is in accordance with the scheme regulations;

b

the valuation has been carried out in a way which is not inconsistent with other valuations under subsection (3);

c

the rate of employer contributions is set as specified in subsection (2).

5

A report under subsection (4) must be published; and a copy must be sent to the scheme manager and (if different) the responsible authority.

6

If a report under subsection (4) states that, in the view of the person making the report, any of the aims in that subsection has not been achieved—

a

the report may recommend remedial steps;

b

the scheme manager must—

i

take such remedial steps as the scheme manager considers appropriate, and

ii

publish details of those steps and the reasons for taking them;

c

the responsible authority may—

i

require the scheme manager to report on progress in taking remedial steps;

ii

direct the scheme manager to take such remedial steps as the responsible authority considers appropriate.

7

The person appointed under subsection (4) must, in the view of the responsible authority, be appropriately qualified.