10 Jun 2014: TPR publishes revised funding code
TPR has published its revised draft Code of Practice on Funding following feedback received from the consultation which closed in February. 
In response to feedback the revised code is somewhat shorter than the initial draft and was accompanied by a 9 page ‘Essential guide’ for trustees containing a high level view of the defined benefit funding process and the 9 principles covering TPR’s expectations of trustees and employers.
The revised Code carries forward the key themes from the initial draft and any changes made are for reasons of clarity.  Key points of clarification include:
  • The requirement to minimise any adverse impact on the sustainable growth of an employer is an objective for the regulator, not for trustees - the trustees’ objective is to comply with their fiduciary and legislative duties
  • Trustees should seek to ‘manage’, not necessarily ‘mitigate’ risk, and the employer should neither have to cover all conceivable risks, nor repair immediately those that crystallise
  • The emphasis on reasonable affordability has moved away from repaying deficits as quickly as reasonably affordable to considering the appropriate period in which to do so in view of the risks to the scheme and the impact on the employer
  • It may be appropriate for schemes with strong technical provisions and covenants to have longer recovery plans

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