TPR consults on its new “Statement of strategy” guidance

Partner Janet Brown comments: “The new DB scheme funding requirements edged closer to the starting blocks today, with the publication of TPR’s consultation on its Statement of Strategy (“Statement”) guidance.

Coming into force later this year, DB schemes will be required to have a funding and investment strategy (“F&I Strategy”) aimed at achieving “low dependency” on their sponsoring employer by the time (“the relevant date”) they are “significantly mature”. Trustees will be required to produce their first F&I Strategy no later than 15 months after the effective date of the first actuarial valuation on or after 22 September 2024.

Designed to facilitate better trustee engagement, and better understanding and accountability between trustees and TPR, the strategy must be captured in writing. As required by the draft F&I regulations, the consultation therefore focuses on the proposed form of the Statement, as well as the type and extent of information that will need to be submitted (and evidenced) to TPR. Accompanied by an example of what a Statement might look like (which following in the footsteps of the DC Chair’s statement, the template(s) makes clear it’s all about communication with TPR – members may need to await the film rights being sold to have a more member friendly version of strategy), TPR notes that there will be four Statement templates, depending on whether a scheme has yet reached its “relevant date” and which of the two funding tracks, Fast or Bespoke, a scheme is running along. It also makes clear that it will request less information from smaller schemes.

With the final version of the new DB funding Code not expected until the summer, there is still some way to go until the new requirements reach the home straight. But TPR seems to be limbering up for the final F&I strategy push.”