Pensions Act 2004

Pensions Act 2004

2004 CHAPTER 35

Commentary on Sections

Part 3 – Scheme Funding

Scheme funding

Section 223: Statement of funding principles

799. Subsection (1) requires the trustees or managers of a scheme to prepare, periodically review and if necessary revise a statement of funding principles. The statement of funding principles is a written statement of the trustees’ policy for ensuring that the statutory funding objective is met, and such other matters as may be prescribed.

800. Subsection (2) requires that the statement records any decisions by the trustees or managers on:

• the methods and assumptions to be used in calculating the scheme’s technical provisions; and

• the period over which a failure to meet the statutory funding objective would be rectified and the manner in which it will be rectified.

801. Subsection (3) enables regulations to set out the period within which the statement of funding principles must be prepared, and setting out requirements for its review and, where necessary, revision. It is intended that the statement of funding principles should be reviewed at least every three years.

802. Subsection (4) enables the Regulator to impose a civil penalty on trustees or managers who do not take reasonable steps to comply with these requirements.