October implementation for new pension regulations

02 September 2005
New regulations governing the funding of occupational pensions will come into force on October 31.

The new minimum funding rules are designed to prevent occupational pension schemes from becoming grossly under funded and unable to meet their obligations.

The Government said that the delay in publishing the regulations – which had been expected in September – is due to the number of issues raised in the consultation process.

The Government said it realised the industry was keen to know the details of the final legislation but insisted that it was prudent to take into account all the concerns raised about the draft legislation before final publication.

The new legislation will require trustees to take actuarial advice before making funding decisions and to have in place a recovery plan for any shortfall.

Pensions Minister Stephen Timms said: "The new scheme funding requirements will replace the MFR and will allow the trustees of each scheme to develop an appropriate funding strategy which takes account of the specific factors and circumstances of their scheme.

"Scheme members will also be better informed about the funding position of their scheme, and any associated risks and the regulator will have new powers to help resolve disputes about funding issues between the trustees and the sponsoring employer."

Alongside the legislation the Government is set to publish a code of practise on the practically implementations of the new scheme and a statement from the Pensions Regulator on how it intends to operate.

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