Industry organisations have welcomed The Pensions Regulator’s (TPR) delay to the Defined Benefit (DB) Funding Code, arguing that this is the “optimum outcome” for DB schemes.

TPR recently confirmed the delay in the launch of the new DB Funding Code, from October 2023 until April 2024, as part of its 2023/24 Corporate Plan.

Yet Pensions and Lifetime Savings Association (PLSA) head of DB, LGPS and investment, Tiffany Tsang, argued that this confirmation was “the optimum outcome for DB Schemes, something the industry has been lobbying for”.

Tsang also argued that the six-month extension makes sense given that the guidance, when implemented, will be in place for many years to come.

She continued: "Not only will this extension allow for the minutia of the regime to be calibrated it will also give schemes the much-needed time to prepare and carefully consider how they will comply.

“Although there is greater flexibility in the draft code, DB schemes should be given more latitude over how to define maturity and on the requirements of schemes as they approach low dependency.

"Not all DB schemes are the same, some are open, some are closed and all are at different levels of maturity, and not all employer covenants are the same.

"Therefore, it is important for the final regime to fully recognise this and allow schemes the ability to take different - perhaps even riskier - approaches where appropriate.”

Broadstone head of policy, David Brooks, also suggested that the news was not unexpected, highlighting recent research that showed that the vast majority (91 per cent) of trustees expected a delay to the implementation of the code.

However, Brooks warned that questions still remain over the "burdensome nature" of the code, especially for smaller schemes.

“It is unclear what changes will be made following the latest consultation, which highlighted some issues around the level of regulatory pressure this could place on small schemes and the costs of running their scheme," he continued.

"It will be interesting to see whether the regulations are also pushed back or whether it is only the code that is delayed.”

Adding to this, LCP partner, Jon Forsyth, argued that whilst the delay is "not a huge surprise", it is the latest in a series of delays, and could "move the new funding code down the trustee priority list yet again".

"We hope the Department for Work and Pensions (DWP) in particular will use this extra time to reflect the industry feedback in the regulations, and work with TPR to make them more consistent with the draft code.

"We also hope for no further delays – though these are certainly possible given all the moving parts and process that must be gone through.”

Timing on the regulations has yet to be confirmed, although the Pensions Minister recently suggested that the timing for the DB funding regulations would be somewhat dependent on an update from the Work and Pensions Committee, in order to reflect any recommendations around liability-driven investment (LDI).

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