The Pensions Regulator

The Pensions Regulator releases a further Defined Benefit scheme funding module of the Trustee toolkit

Ref: PN06-33
3 October 2006

• 'DB recovery plans, contributions and funding principles' module released
• Aimed specifically at trustees of Defined Benefit schemes
• Builds on two previous scheme funding modules released in August
• Features case studies and problems for participants to solve

The 'Defined Benefit recovery plans, contributions and funding' module has been released by the Pensions Regulator as part of its free online e-learning programme for trustees at www.trusteetoolkit.com

Aimed specifically at pension trustees of DB schemes, the module completes the trio of scheme funding toolkits. It explores a number of issues surrounding scheme funding and invites the learner to complete a series of exercises.

In the latest module trustees learn about accrued benefits and future service funding methods, recovery plans, setting the contribution rate and the statement of funding principles.

Regulated community learning manager, Terry Clayworth said: "This module, together with the previously released DB funding modules, provides trustees with the opportunity to develop their knowledge and understanding of the concepts underlying the new arrangements for funding DB schemes. Having this knowledge and understanding of the new arrangements will enable trustees to actively engage with their advisers in examining the issues for their own schemes."

Further modules for both defined benefit and defined contribution scheme trustees are in preparation.

Editor's notes

1. This is module five out of a planned total of nine Trustee toolkit modules.
2. The Pensions Act 2004 (sections 247-249) requires trustees to have knowledge and understanding of the law relating to pensions and trusts, and the principles relating to the funding of occupational schemes and the investment of scheme assets. They must also be conversant with their own scheme's policy documents.
3. The code of practice on trustee knowledge and understanding is now in effect. This helps trustees to comply with the requirements and can be found, along with additional guidance for trustees, on the regulator's website at www.thepensionsregulator.gov.uk/trustees.
4. The Trustee toolkit syllabus has been based on 'Scope guidance' available on the regulator's website, and also forms the basis of a new voluntary qualification for trustees launched by the Pensions Management Institute. This new voluntary qualification will replace the current Trustee Certificate offered by the Pensions Management Institute.
5. The Pensions Regulator is the regulator of work-based pensions in the UK, with wide-ranging and flexible powers under the Pensions Act 2004.
6. The powers of the Pensions Regulator include the ability to:
   • collect more detailed scheme information;
   • issue improvement notices and third party notices, enabling the regulator to ensure problems are put right;
   • freeze a scheme that is at risk, while the regulator investigates; and
   • prohibit trustees who are judged not fit and proper to carry out their duties.
   • The Pensions Act 2004 also imposes a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator.